The direct cost incurred in using an asset for the purpose for which it was intended is termed as _____.
A) cost of operating
B) cost of owning
C) whole of life cost
D) cost of disposition

Question

Quizplus · Accepted Answer

The cost of operating refers to the direct cost incurred in using an asset for its intended purpose, such as fuel, maintenance, and repairs. This is the cost associated with keeping the asset functional and productive. The cost of owning includes not only the cost of operating but also the cost of acquisition, financing, and depreciation. The whole of life cost includes all the costs associated with an asset, from acquisition to disposal. The cost of disposition refers to the cost associated with getting rid of an asset, such as selling or scrapping it.

The Direct Cost Incurred in Using an Asset for the Purpose