Question:medium

Why are services called ‘intangible products'? Give any two reasons.

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To remember the core characteristics of services, use the standard IHIP framework:
$\text{\textbf{I}ntangibility} \quad \text{\textbf{H}eterogeneity} \quad \text{\textbf{I}nseparability} \quad \text{\textbf{P}erishability}$
Because services are intangible and perishable, cost accountants must use specialized units of measurement, such as Composite Cost Units (e.g., Room-Days for hotels, Passenger-Kilometers for transport).
Updated On: Jun 17, 2026
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