The costing technique, in which the actual direct rates are multiplied to quantity of direct cost inputs is classified as __________?
Correct answer: C. actual costing
- A. priced costing
- B. direct costing
- C. actual costing
- D. indirect costing
Explanation
Actual costing uses actual direct-cost input quantities multiplied by their actual direct rates, while normal costing typically uses budgeted overhead rates. Therefore, the technique is actual costing.
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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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