COST ACCOUNTING
COST MANAGEMENT SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Subinventory, Lot, Serial, Grade
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Subinventory, Make, Lot, Serial
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Subinventory, Lot, Serial, Locator
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Grade, Subinventory, Locator, Serial
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Grade, Serial, Group, Lot
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Detailed explanation-1: -Absorption costing is one of the methods of calculating the cost of goods produced by the manufacturer. The technique includes both direct and indirect costs. Any cost related to the product’s manufacturing is considered, such as wages, materials, rent, and salaries. Hence, the given option is correct.
Detailed explanation-2: -Direct costing. This is a compilation of all costs directly attributable to the production and sale of a product, which includes direct materials, piece rate labor, and commissions. The resulting cost may be used to establish the minimum price at which a product can be sold and still generate a profit.
Detailed explanation-3: -The four main inventory valuation methods are FIFO or First-In, First-Out; LIFO or Last-In, First-Out; Specific Identification; and Weighted Average Cost.
Detailed explanation-4: -Standard costing is a technique where the firm compares the costs that were incurred for the production of the goods and the costs that should have been incurred for the same. Essentially it is the comparison between actual costs and standard costs. The differences between the two are variances.