COST ACCOUNTING
VARIABLE COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Costs that do not change with output
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Costs that are essential but not directly related to manufacturing
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Costs directly involved with making the product
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money spent on a regular basis
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Detailed explanation-1: -A direct cost is a price that can be directly tied to the production of specific goods or services. A direct cost can be traced to the cost object, which can be a service, product, or department. Direct costs examples include direct labor and direct materials.
Detailed explanation-2: -What are direct costs? Direct costs are expenses that a company can easily connect to a specific “cost object, ” which may be a product, department or project. This category can include software, equipment and raw materials. It can also include labor, assuming the labor is specific to the product, department or project.
Detailed explanation-3: -Direct costs are the expenses a business incurs directly to make a product or service, or buy a wholesale product for resale. (All other costs are considered to be indirect costs.)
Detailed explanation-4: -Direct and indirect costs are the two primary categories of expenditures that may be borne by businesses. Direct costs are also variable costs which means they fluctuate with rates of output, such as inventory. Some costs, such as indirect costs are more difficult to attribute to any particular product.
Detailed explanation-5: -Direct costs are expenses associated with production and sales. The cost of raw material and labor required to manufacture a product would be categorized as direct costs. Indirect costs are fixed expenses a business incurs to keep the company running no matter the activity level.