Multiple choice

Directions: Choose the correct option and complete the sentence.

Cost which in addition to normal requirement incurred in accordance with the policy of an undertaking is

  1. discretionary cost

  2. policy cost

  3. idle cost

  4. holding cost

  5. expired cost
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A policy cost is a cost incurred as a result of management decisions or organizational policies, rather than being strictly required by the production process itself. It is often discretionary in nature.

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