COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following statements are correct.a. Prime cost is the total of direct wages and variable overheads.b. Abnormal cost is uncontrollable.c. Contract costing method is used in ship building.d. Cost accounting is a techinique of managerial control.
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All statements are correct
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Statements A, C & D are correct
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Except statement ‘C’ is correct
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Only statements ‘C’ & ‘D’ are correct
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Explanation:
Detailed explanation-1: -The prime cost equation is equal to the cost of raw materials plus direct labor.
Detailed explanation-2: -Explanation: Prime Cost: It consists of the costs of direct materials that go into the product, the costs of direct labor and direct expenses.
Detailed explanation-3: -Abnormal costs are the costs that are uncommon, irregular, or sporadic which are not brought about because of unusual circumstances of the activities or production. For example, obliteration because of fire, shut down of hardware, equipment and machinery, lockouts, and so forth.
Detailed explanation-4: -Direct Costs Examples Direct labor. Direct materials. Manufacturing supplies. Wages for the production staff.
There is 1 question to complete.