Qualco inspects 10% of each raw material shipment received.The inspection costs are an example of a/an
A)unit-related cost.
B)batch-related cost.
C)facility-sustaining cost.
D)product-sustaining cost.

Question

Quizplus · Accepted Answer

Inspecting 10% of each shipment is a batch-related cost as it only applies to a specific batch or shipment of raw materials. Unit-related costs would be incurred for each individual unit produced, facility-sustaining costs would be incurred to maintain the entire facility, and product-sustaining costs would be incurred to support a specific product over its entire life cycle.

Qualco Inspects 10% of Each Raw Material Shipment Received