If the revenues are $85000 and throughput contribution is $63700, then direct material cost of goods sold will be ___________?
Correct answer: A. $21,300
- A. $21,300
- B. $148,700
- C. $138,700
- D. $118,700
Explanation
Throughput contribution equals revenue minus direct material cost, so direct material cost of goods sold is $85,000 − $63,700 = $21,300. Other production costs are treated as operating expenses in throughput accounting.
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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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