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Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher
Edition 3ISBN: 0073527114Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher
Edition 3ISBN: 0073527114Basic Concepts
For each of the following statements, indicate whether it is true, false, or uncertain. Explain why. Give examples in your answer.
a. A cost is something used up to produce revenues in a particular accounting period.
b. The cost of direct materials is fixed per unit but variable in total.
c. Variable costs are direct costs; only fixed costs are indirect costs.
Verified
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Cost
Cost is the amount of resources given up in exchange for another resource. When we purchase an asset, we pay cash for the asset. In the way cash resource is given up in order to obtain asset. This is cost for company.
Variable co st
Variable costs are cost which varies with number of units produced or sold. Variable cost per unit remains same however total variable costs varies with volume of activity. Total variable cost is calculated as variable cost per unit multiplied by number of units produced.
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