Question

All of the following are examples of facility level costs except: Select one: a. Costs of cleaning the workplace. b. Costs of custodial work. c. Costs of personnel support. d. Costs of receiving shipments. e. Costs of providing electricity.

Answer 1

Answer:

The answer is d. Costs of receiving shipments

Explanation:

The facility level costs are fixed, indirect costs that are incurred to support and to maintain the general facilities ( factories, buildings...) of the firm which are not easily allocated to a single product because these costs are incurred for the whole production, selling, administration process as a whole.

From the concept above, Cost of receiving shipments is not a facility level cost because it incur for production process and may be tracked, allocated to single product or a range of products. Thus, d. is the right answer.

a. Costs of cleaning the workplace; b. Costs of custodial work; c. Costs of personnel support; e. Costs of providing electricity are all costs that incurred to maintain the smooth/safe operation of the general facilities. Thus, they are not right choices.