COST ACCOUNTING
COST MANAGEMENT SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Complete Quick Setup and then create the user-defined cost using the Manage Cost Component task.
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This requirement will already be met by the default data generated when using Quick Setup.
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Create the cost in Manage Cost Scenarios.
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You can only track costs for Direct Labor and Direct Equipment; this requirement cannot be met.
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Detailed explanation-1: -Answer and Explanation: The labor and overhead cost need to add to inventory cost because it helps determine the value of material, cost of a sold product, and total inventory cost involved in the process. It is necessary to estimate the cost related to product and expenses.
Detailed explanation-2: -However, the most common techniques in manufacturing companies include Just in Time (JIT), Activity Based Costing (ABC), Target Costing, Life Cycle Costing, Throughput Accounting and Kaizen costing while Activity Based Costing is the most commonly used technique in Service sector.
Detailed explanation-3: -Usually manufacturing overhead costs include depreciation of equipment, salary and wages paid to factory personnel and electricity used to operate the equipment.