Practice Based On Nature/elements (20.2.1) - Cost Accounting Basics

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6 sample questions

Question 1.
Define direct costs with an example.
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What costs can be counted directly to a product?
Question 2.
What are indirect costs?
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Think of costs that keep the business running but don't apply to one specific product.
3Question 3.
What are direct costs?
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Think of costs that directly impact production.
4Question 4.
Indirect costs can be directly traced to a specific product.
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Remember what indirect means?
Question 5.
A company needs to calculate its total production costs. Direct costs total ₹1,00,000, and the indirect costs total ₹50,000. What percentage of the total costs are direct costs?
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Think about calculating the proportion of total costs that are direct.
Question 6.
Analyze the effects of treating a fixed cost as a variable cost in terms of budgeting inaccuracies.
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Ponder the nature of fixed costs in review of budgeting.

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