{"id":46736,"date":"2024-04-15T22:16:40","date_gmt":"2024-04-15T22:16:40","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=46736"},"modified":"2024-04-15T22:16:40","modified_gmt":"2024-04-15T22:16:40","slug":"the-costing-method-in-which-fixed-factory-overheads-are-added-to-inventory-is","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-costing-method-in-which-fixed-factory-overheads-are-added-to-inventory-is\/","title":{"rendered":"The costing method in which fixed factory overheads are added to inventory is"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;process costing&#8221; option2=&#8221;activity based costing&#8221; option3=&#8221;marginal costing&#8221; option4=&#8221;standard costing&#8221; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>A. process costing<\/strong><\/p>\n<p>Process costing is a costing method used to assign costs to products or services that are mass-produced in a continuous process. In process costing, costs are accumulated by department or process, and then allocated to units of production using a predetermined cost per unit.<\/p>\n<p>Fixed factory overheads are costs that do not vary with the volume of production, such as depreciation on factory buildings and equipment. In process costing, fixed factory overheads are typically allocated to units of production using a predetermined rate based on the estimated total fixed factory overheads for the period and the estimated total units of production for the period.<\/p>\n<p>The other options are incorrect because:<\/p>\n<ul>\n<li><strong>B. activity based costing<\/strong> is a costing method that assigns costs to products or services based on the activities that are required to produce them. In activity based costing, costs are accumulated by activity, and then allocated to products or services using a predetermined cost per activity.<\/li>\n<li><strong>C. marginal costing<\/strong> is a costing method that only includes variable costs in the cost of goods sold. Fixed costs are treated as period costs and are expensed in the period in which they are incurred.<\/li>\n<li><strong>D. standard costing<\/strong> is a costing method that uses predetermined standards to assign costs to products or services. Standard costs are set in advance of production and are based on expected costs for materials, labor, and overhead.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;process costing&#8221; option2=&#8221;activity based costing&#8221; option3=&#8221;marginal costing&#8221; option4=&#8221;standard costing&#8221; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-46736","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The costing method in which fixed factory overheads are added to inventory is<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-costing-method-in-which-fixed-factory-overheads-are-added-to-inventory-is\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The costing method in which fixed factory overheads are added to inventory is\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;process costing&#8221; 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