The throughput contribution is added into direct material cost of goods sold to calculate _________?
Correct answer: B. revenues
- A. indirect material
- B. revenues
- C. expenses
- D. direct material
Explanation
Throughput contribution equals revenue minus direct material cost, so adding it to direct material cost of goods sold reconstructs revenues. The other choices are not the relevant throughput-accounting total.
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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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