ICAEW BIP · Chapter 3 · Question 8 of 8
Which of the following is a characteristic of services that makes service costing different from product costing?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Perishability: a service cannot be stored for later sale
Explanation
Services are typically intangible, perishable, heterogeneous (variable), and produced and consumed at the same time (simultaneity, or inseparability). Perishability means unused capacity, such as an empty hotel room for a night, cannot be stored. Each of the other options states the opposite of a true service characteristic.
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