What Is a Drawback to Using the Requirement Costing Method

question 111

Multiple Choice

What is a drawback to using the requirement costing method of software and hardware evaluation?

• A)Dollar estimates of costs and benefits are not included.
• B)Intangible factors such as reliability and vendor support are overlooked.
• C)The weights and points used are assigned subjectively.
• D)There is no drawback to using the requirements costing method.

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Definitions:

Fixed Overhead

Regular, ongoing costs incurred by a business that do not vary with production levels, such as rent, salaries, and insurance.

Period Cost

A financial term referring to costs that are not directly tied to the production process and are expensed in the period in which they are incurred.

Sales Revenues

The revenue a company earns from selling products or offering services.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including the cost of materials and labor.