Q301
An acquisition cost of raw material is to be used in manufacturing, and becoming a component of cost object is classified as
A.
direct material costs
AnswerB.
indirect material costs
C.
direct labour costs
D.
indirect labour costs
Answer: Option A
Solution
Answer: Option A
Solution:
An acquisition cost of raw material is to be used in manufacturing, and becoming a component of cost object is classified as direct material costs. Direct materials cost the cost of direct materials which can be easily identified with the unit of production. For example, the cost of glass is a direct materials cost in light bulb manufacturing.