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Question

As per AS-2, the historical cost of manufactured inventories should be arrived at on the basis of __________________.

A
Absorption costing
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B
Marginal costing
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C
Standard costing
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D
Estimated costing
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Solution

The correct option is C Absorption costing
Absorption Costing is a method of calculating the cost of a product taking into consideration the indirect and direct costs as well.It Includes Freight,Salary,wages,power expenses etc.

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