COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
direct expense
|
|
|
indirect expense
|
|
|
variable expense
|
|
|
fixed expense
|
|
|
semi-variable expense
|
Detailed explanation-1: -Answer: Opportunity cost is an indirect expense.
Detailed explanation-2: -Another way to say this is: it is the value of the next best opportunity. Opportunity cost is a direct implication of scarcity.
Detailed explanation-3: -Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services. When economists use the word “cost, ” we usually mean opportunity cost. The word “cost” is commonly used in daily speech or in the news.
Detailed explanation-4: -Direct expenses means all expenses directly connected with the manufacture, purchase of goods, and bringing them to the point of sale. Direct expenses include carriage inwards, freight inwards, wages, factory lighting, coal, water and fuel, royalty on production, etc.