COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A past cost is avoidable because is has already been incurred.
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Period costs are those costs related to the manufacture of a product.
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Product costs consist of direct materials, direct labour and overhead costs
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Factory overheads can be classied as direct cots.
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Detailed explanation-1: -Explanation: Product costs consist of direct materials, direct labor, and factory overhead. Materials and labor together are prime costs, while labor and overhead are conversion costs. Direct materials and conversion costs together are product costs.
Detailed explanation-2: -A direct cost includes raw materials, labor, and expense or distribution costs associated with producing a product. The cost can easily be traced to a product, department, or project.
Detailed explanation-3: -The concept of cost is a key concept in Economics. It refers to the amount of payment made to acquire any goods and services. In a simpler way, the concept of cost is a financial valuation of resources, materials, risks, time and utilities consumed to purchase goods and services.
Detailed explanation-4: -In general, three types of expenses are included in the cost of products: the cost of direct materials, direct labor costs and manufacturing overhead costs.