810-440 · Question #141
Which type of expenditure is the purchase of heavy equipment considered?
The correct answer is B. chargeback. The purchase of heavy equipment, in the context of internal cost management, can be considered a chargeback expenditure where costs are allocated to consuming departments.
Question
Which type of expenditure is the purchase of heavy equipment considered?
Options
- Aconsumption
- Bchargeback
- Cshowback
- Doperational
How the community answered
(18 responses)- B94% (17)
- D6% (1)
Why each option
The purchase of heavy equipment, in the context of internal cost management, can be considered a chargeback expenditure where costs are allocated to consuming departments.
Consumption refers to a usage-based billing model, typically for services or utilities, rather than the initial purchase of a tangible asset like heavy equipment.
Chargeback is an internal accounting method where the cost of resources, including the acquisition of heavy equipment, is directly allocated and billed to the specific internal departments or business units that consume those resources.
Showback is an internal cost reporting mechanism that displays resource usage costs to departments without actual billing, unlike chargeback which involves transferring funds.
Operational expenditure (OpEx) refers to the ongoing costs of running a business, such as salaries and utilities, not the one-time acquisition cost of long-term assets like heavy equipment which is typically a capital expenditure (CapEx).
Concept tested: Internal IT cost management and allocation methods
Source: https://learn.microsoft.com/en-us/azure/cost-management-billing/cloudyn/chargeback-and-showback
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