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Expense Side of Statement of Profit and Loss

are not trace...

Question

_______ are not traceable to plant, department or unit of operation or individual final product.

A

Indirect cost

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B

Direct cost

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C

Sunk cost

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D

Incremental cost

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Solution

The correct option is A Indirect cost
Indirect costs are indirectly related to the production process and can not uniquely be linked to a specific process, product or department of the firm. These usually consists of fixed costs such as rent, purchase of machinery etc.

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