Costing - Study Mode
[#506] Relationship between change in activity and change in total costs is considered as
Correct Answer
(B) cause and effect relationship
Explanation
Solution: Relationship between change in activity and change in total costs is considered as cause and effect relationship.
[#507] Direct cost assignment for specific cost object is classified as
Correct Answer
(B) cost tracing
Explanation
Solution: Direct cost assignment for specific cost object is classified as cost tracing. Cost tracing is the process of directly matching a cost with a product being produced, where cost allocation uses estimates to apply costs to products.
[#508] In accounting, cost incurred in past or in historical financial statements is classified as
Correct Answer
(A) actual cost
Explanation
Solution: In accounting, cost incurred in past or in historical financial statements is classified as actual cost. Actual cost is the actual expenditure made to acquire an asset, which includes the supplier-invoiced expense, plus the costs to deliver, set up, and test the asset.
[#509] Collection of cost data, according to accounting system in an organized way is classified as
Correct Answer
(C) cost accumulation
Explanation
Solution: Collection of cost data, according to accounting system in an organized way is classified as cost accumulation. Cost accumulation involves the use of a formal cost accounting system to collect cost information.
[#510] Which of following is an example of purchasing costs?
Correct Answer
(C) insurance
Explanation
Solution: Insurance is an example of purchasing costs. It is important when you decide to buy a home that you have a full understanding of the costs associated with your purchase.