In accounting, the cost incurred in past or in historical financial statements is classified as ________?
Correct answer: C. actual cost
- A. past cost
- B. budgeted cost
- C. actual cost
- D. incurred cost
Explanation
Actual cost is the cost that has already been incurred and is reported from historical records. Budgeted cost is an estimate prepared for a future period, so it is not the historical amount.
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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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