Costing - Study Mode
[#541] Assertion (A) Marginal cost and differential cost do not convey the same meaning in all the circumstances. Reason (R) Differential cost increases or decreases due to change in fixed cost.
Correct Answer
(C) (A) is true, but (R) is false
[#542] The method of costing used in a refinery is . . . . . . . . costing.
Correct Answer
(A) process
[#543] Direct labour means ________.
Correct Answer
(A) labour which can be conveniently associated with aparticular cost unit
Explanation
Solution: Direct labour means labour which can be conveniently associated with aparticular cost unit. Direct Labour cost consists of wages paid to workers directly engaged in manufacturing or handling a product, job or process.
[#544] The type of process loss that should not affect the cost of inventory value is _________.
Correct Answer
(A) abnormal loss
Explanation
Solution: The type of process loss that should not affect the cost of inventory value is abnormal loss. Generally, an abnormal loss occurs because of negligence, carelessness, theft, mischief, fraud of employees, or inefficiency.
[#545] If the actual loss is more than the estimated normal loss, then it is _________.
Correct Answer
(A) abnormal loss
Explanation
Solution: If the actual loss is more than the estimated normal loss, then it is abnormal loss. Abnormal loss is the extra loss resulting when actual loss is greater than normal or expected loss, and it is given a cost.