The following costs were incurred in August:Direct Material ..... RM20, 000Direct Labour ..... RM18, 000Manufacturing overhead ..... RM21, 000Selling expenses ..... RM16, 000Administrative expenses ..... RM21, 000 Prime costs during the month totaled:

INTRODUCTION TO COST ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The following costs were incurred in August:Direct Material ____ RM20, 000Direct Labour ____ RM18, 000Manufacturing overhead ____ RM21, 000Selling expenses ____ RM16, 000Administrative expenses ____ RM21, 000 Prime costs during the month totaled:

A	RM39, 000
B	RM59, 000
C	RM96, 000
D	RM38, 000

Explanation:

Detailed explanation-1: -Direct costs examples include direct labor and direct materials. Although direct costs are typically variable costs, they can also be fixed costs.

Detailed explanation-2: -Manufacturing costs are the costs incurred during the production of a product. These costs include the costs of direct material, direct labor, and manufacturing overhead. The costs are typically presented in the income statement as separate line items. An entity incurs these costs during the production process.

Detailed explanation-3: -Process costing:This is the accumulation of labor, material and overhead costs across departments or entities, with the total production cost then being allocated to individual units. Process costing is used when large quantities of the same product are manufactured, usually in long production runs.

Detailed explanation-4: -Understanding the Direct Materials Cost Formula The following formula can calculate the cost: Beginning Materials + Costs of Materials Purchased-Ending Materials = Direct Material Used.

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