Question

What costs are treated as product costs under direct costing? a. Only direct costs b. Only...

What costs are treated as product costs under direct costing?

a.

Only direct costs
b.

Only variable manufacturing costs
c.

All variable costs
d.

All variable and fixed manufacturing costs

A study that highlights the significant cost and revenue data between two alternatives is a(n):

a.

Cost analysis
b.

Income analysis
c.

Differential analysis
d.

Distribution analysis
Business   Accounting   
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Homework Answers

Answer #1

1.)THE CORRECT ANSWER IS OPTION B. ONLY VARIABLE MANUFACTURING COST

UNDER DIRECT COSTING ONLY VARIABLE MANUFACTURING COST IS CALLED AS PRODUCT COST.

VARIABLE MANUFACTURING COST INCLUDE MATERIAL COST ,DIRECT LABOUR COST , AND VARIABLE MANUFACTURING COST .VARIABLE SELLING AND ADMINISTRATION EXPENSES ARE NOT PART OF PRODUCT COST UNDER DIRECT COSTING

2.The correct answer is option C differential analysis

Differential cost analysis is the change in the costs which may take place due to increase or decrease in output , change in sales volume , alternate method of production , make or buy decision , change in product mix etc. So , differential cost analysis is result of alternative course of action.

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