The total costs incur in a production process, is divided by total number of output units, to calculate the ____________?
Correct answer: A. unit costs
- A. unit costs
- B. cost of direct labor
- C. cost of direct material
- D. cost of indirect labor
Explanation
Dividing total production cost by the number of output units gives the cost per unit, commonly called unit cost. Direct and indirect labor or material are individual cost components, not this calculated 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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