Question

Windsor Corp., a technology firm, has an internal search engine that helps employees find answers to queries. The search engine provides results depending on the preferences of the employees. These preferences are automatically learned as the employees continue to use the search engine. The search engine is maintained by an expensive data management system. The company allocates half its budget for the maintenance of the data management system. In this scenario, the cost incurred by Windsor Corp. is an example of _____.

Answer 1

Answer:

The correct answer is letter "A": processing cost.

Explanation:

Process costing is a costing method that consists in producing units that are constantly being manufactured. The main purpose of this approach is to identify the total cost of production to divide it by the total number of goods manufactured. Then, the cost of production per unit is determined.