In determining unit costing
Determination in operating cost
Determining in contract
In determining process cost
Answer is Right!
Answer is Wrong!
The correct answer is: A. In determining unit costing.
Fixed costs are costs that do not change in total with changes in the level of output. Variable costs are costs that change in total in direct proportion to changes in the level of output.
Unit costing is the process of determining the cost of a single unit of output. It is important to classify costs as fixed or variable in order to accurately determine unit costing.
Fixed costs are not included in unit costing because they do not change with changes in the level of output. Variable costs are included in unit costing because they do change with changes in the level of output.
The other options are incorrect because:
- B. Determination in operating cost is not an accurate statement. Operating costs are all costs that are incurred in the day-to-day running of a business. They can be fixed or variable.
- C. Determining in contract is not an accurate statement. Contracts can include a variety of costs, both fixed and variable.
- D. In determining process cost is not an accurate statement. Process costing is a method of accounting for costs that is used in industries where products are produced in a continuous process. It is not relevant to the classification of costs as fixed or variable.