How do common costs arise?
A)From the joint use of a facility or a service by several products,departments,or processes.
B)From the direct use of a facility or a service by several products,departments,or processes.
C)From the variable use of a facility or a service by several products,departments,or processes.
D)From the marginal use of a facility or a service by several products,departments,or processes.

Question

Quizplus · Accepted Answer

Common costs arise from the joint use of a facility or a service by several products, departments, or processes. These costs cannot be attributed solely to one particular product or department, as they are incurred due to the shared use of the facility or service. Examples of common costs include rent, utilities, and maintenance expenses for a shared production facility.

How Do Common Costs Arise