The terms used in manufacturing cost systems are ____________?
Correct answer: D. both B and C
- A. manufacturing costs
- B. prime costs
- C. conversion costs
- D. both B and C
Explanation
Prime cost and conversion cost are standard terms used to analyse manufacturing costs: prime cost is direct materials plus direct labour, while conversion cost is direct labour plus manufacturing overhead. Option D identifies both measures intended by the question.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
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.
Practise Cost Accounting
941 free Cost Accounting MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Cost Accounting questions
In an income statement, when costs become cost of sold goods and manufactured products are sold, such costs are
The prime cost is $50000 and the direct manufacturing labor is $10000, then the direct material cost will be ____________?
The direct service labor is $5000, the idle time wages are $1000 and the overtime premium is $450, then the total figure would be _________?
The direct manufacturing labor costs is added into manufacturing overhead cost to calculate ___________?
In cost terms, the direct manufacturing labor cost is included in ___________?
The supplies, plant maintenance, plant rent, plant insurance and cleaning labor come under the type of costs called ____________?