JAMB Principles of Accounts 2009 Question 28

Question 28

Manufacturing Accounts

The costs incurred by departments that support the production department with such activities as maintenance, production control and storage are called

  1. A.autonomous costs
  2. B.service costs
  3. C.supporting costs
  4. D.subsidiary costs
Show the answer and explanation

Answer: B (service costs)

Explanation

Service departments such as maintenance and stores support production; their costs are service costs.