A cost hierarchy is used by businesses and is divided into four layers. Each layer has various costs assigned to it and is given a rationale for its use. Which of the following best represents the rationale for product/process-level costs?
A) Costs enable an entire product line or individual type of service delivery
B) Costs enable the overall manufacturing process/delivery of services effort
C) Costs enable the production of each batch
D) Costs enable the production of each unit

Question

Quizplus · Accepted Answer

Choice A represents the correct rationale for product/process-level costs, making it the correct answer. Choice B represents the rationale for facility-level costs, Choice C represents the rationale for batch-level costs, and Choice D represents the rationale for unit-level costs.

A Cost Hierarchy Is Used by Businesses and Is Divided