Expenditures for acquisition of raw materials for your products are a part of which Costing type?1 puntoDirect CostIndirect CostStaff CostMaterial Cost
Question
Expenditures for acquisition of raw materials for your products are a part of which Costing type?
1 punto
- Direct Cost
- Indirect Cost
- Staff Cost
- Material Cost
Solution
To determine the correct costing type for expenditures related to the acquisition of raw materials for products, we need to analyze the options provided:
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Direct Cost: This refers to costs that can be directly attributed to the production of specific goods or services. The costs of raw materials directly used in making products fall under this category.
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Indirect Cost: These are costs that are not directly accountable to a specific product. They include overhead costs like utilities or administrative expenses.
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Staff Cost: This involves salaries and wages of personnel involved in production or operations but does not include raw materials.
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Material Cost: While this term broadly refers to the costs associated with raw materials, in costing terminology, raw materials are usually categorized under "Direct Cost."
Final Answer
The expenditures for the acquisition of raw materials for your products are classified as Direct Cost.
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