Costing, which explains how and when scrap affects operating income of company is classified as
A. inventory costing
B. conversion costing
C. normal scrap costing
D. abnormal scrap costing
Answer: Option A
Solution(By Examveda Team)
Costing, which explains how and when scrap affects operating income of company is classified as inventory costing. Inventory is merchandise purchased by merchandisers (retailers, wholesalers, distributors) for the purpose of being sold to customers. The cost of the merchandise purchased but not yet sold is reported in the account Inventory or Merchandise Inventory.Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
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