Answer the following questions using the information below:
The Conity Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $13,000,000 bond issuance, the Electric Mixer Division used $9,100,000 and the Electric Lamp Division used $3,900,000 for expansion. Interest costs on the bond totaled $975,000 for the year.
-The above interest costs would be considered a(n)________.
A) output unit-level cost
B) facility-sustaining cost
C) product-sustaining cost
D) batch-level cost

Question

Quizplus · Accepted Answer

Interest costs are associated with the overall production of a product, and not with any particular output, batch or facility. Therefore, they are a product-sustaining cost.

Answer the Following Questions Using the Information Below