If the cost of direct materials use in the goods sold is $5000 and the total revenues are $9000 then the throughput contribution would be ____________?
Correct answer: C. $4,000
- A. $5,000
- B. $14,000
- C. $4,000
- D. $9,000
Explanation
Under throughput accounting, throughput contribution equals total revenue minus direct material cost, because direct materials are treated as the main truly variable cost: $9,000 − $5,000 = $4,000.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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