Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following is NOT considered a category of costs?

1. Capital expenditures

2. One-time project expenses

3. Ongoing support activities

4. Recurring salary expenses

The correct answer is: Recurring salary expenses

The reasoning behind identifying recurring salary expenses as not considered a category of costs in this context relates to how cost categories are typically defined in supply chain management and financial analysis. Recurring salary expenses are generally considered ongoing operational costs rather than distinct categories of costs that can be classified for specific project evaluation or capital budgeting. Capital expenditures refer to significant investments in long-term assets, which can be categorized and analyzed separately from operating expenses. One-time project expenses are specific costs incurred only for distinct projects and can thus be treated as a category to assess project viability or profitability. Ongoing support activities likewise represent a set of costs associated with maintaining operational efficiencies, which can be measured and analyzed distinctively. Recurring salary expenses, however, are part of the broader operational expenses that support day-to-day activities but do not typically fit into categories that are used for specific project analysis or capital budgeting decisions. Understanding the context of cost categorization helps in differentiating between costs that have strategic implications and those that are more fixed in nature.