Commercial Applications
…………… means amount spent on production or to provide services.
- Cost
- Profit
- Revenue
- Expenditure
Cost
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Answer
Cost
Reason — Cost is the money spent or liability incurred for acquiring goods or services. In management terminology, cost is the expenditure incurred to generate revenue — i.e., the money value of resources used to produce a product or provide a service. Profit is the excess of revenue over cost, revenue is income earned, and expenditure is a broader term that may include capital outlays unrelated to current production.
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Related Questions
Match the following types of costs with their correct examples:
Types of Cost Examples (a) Direct Material 1. Wages paid to quality inspectors (b) Indirect Labour 2. Cloth used in dress making (c) Indirect Material 3. Nails used in carpentry work (d) Direct Labour 4. Salary of a factory manager - a-2, b-4, c-3, d-1
- a-3, b-1, c-2, d-4
- a-4, b-3, c-2, d-1
- a-1, b-2, c-3, d-4
Fixed cost per unit decreases when ……………
- Production volume increases
- Production volume decreases
- Variable cost per unit decreases
- Variable cost per unit increases
Assertion (A): Fixed costs per unit remain constant as production volume increases.
Reason (R): Fixed costs are not dependent on the level of production.
Which of the following is correct?
- Both A and R are true, and R explains A.
- Both A and R are true, but R does not explain A.
- A is true, but R is false.
- A is false, but R is true.
Indirect costs can be directly traced to a specific cost object, such as a product or department.
- True
- False