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JAMB Principles of Accounts 2004 Question 25

Question 25

Manufacturing Accounts

Cost classification in relation to charges is determined by the level of

  1. A.raw materials
  2. B.labour
  3. C.activity
  4. D.profitability
Show the answer and explanation

Answer: C (activity)

Explanation

Costs are classed as fixed, variable or semi-variable according to how they change with the level of activity (output).