COST ACCOUNTING
COST MANAGEMENT SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Item cost profiles are defined at the cost organization level. All items within a cost organization must use the same cost profile.
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Item cost profiles are defined within an inventory organization. There can be only one cost method for an inventory organization.
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Different items within an inventory organization can use different cost profiles, but items within an item category must all use the same cost profile because that is the level at which the default cost profile is defined.
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Cost profiles are ultimately defined at the item level. Different items within the same inventory organization can use different cost profiles.
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Detailed explanation-1: -The cost of inventory includes the cost of purchased merchandise, less discounts that are taken, plus any duties and transportation costs paid by the purchaser.
Detailed explanation-2: -Answer and Explanation: The correct answer is (c) Salaries of the sales staff (sales department shares the building with factory supervisor). Conversion costs include both costs of direct labor and manufacturing overhead. These are manufacturing costs incurred to transform raw materials into finished goods.
Detailed explanation-3: -Item Defined Cost – converts the cost in the item record to the transaction currency using the exchange rate of the transaction subsidiary. Last Purchase Price – calculates estimated cost based on the last purchase price of the item within the transaction subsidiary or location.