What Is Analyzing Cost Overruns to Determine Their Cause an Example

question 84

Multiple Choice

What is analyzing cost overruns to determine their cause an example of?

• A)planning
• B)control
• C)decision making
• D)performance evaluation

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Definitions:

Period Cost

Expenses incurred during a specific time frame that are not directly tied to the production process, such as sales, administration, and marketing expenses.

Direct Materials Inventory

Direct materials inventory refers to raw materials that are directly used in the production of goods. These materials are assets on the balance sheet until they are used in production.

Direct Labor

The labor costs directly tied to the production of goods or services, which can include wages of workers or employees directly involved in manufacturing.

Factory Overhead

The indirect costs associated with manufacturing, including utilities, maintenance, and salaries of non-direct labor employees, that cannot be directly traced to specific products.