If the revenues are $25000 and through put contribution is $12000, then direct material cost of goods sold will be ____________?
Correct answer: D. $13,000
- A. $57,000
- B. $37,000
- C. $47,000
- D. $13,000
Explanation
Throughput contribution equals sales revenue minus direct material cost, so direct material cost is $25,000 − $12,000 = $13,000. Throughput accounting treats direct material as the main truly variable cost.
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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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