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Questions and Answers
What is the main purpose of costing in business, as mentioned in the text?
What is the main purpose of costing in business, as mentioned in the text?
- To estimate the revenue generated by each product
- To analyze the market demand for each product
- To calculate the profit margin for each product
- To record and allocate the expenditure for the determination of costs of product (correct)
Why is it necessary to understand the expenditure involved in business?
Why is it necessary to understand the expenditure involved in business?
- To attract more investors to the business
- To determine the profitability of the business (correct)
- To negotiate with suppliers for lower prices
- To manage the production process efficiently
What are the three elements of a transaction that are necessary components of any business activity?
What are the three elements of a transaction that are necessary components of any business activity?
- Expenditure, revenue, cost
- Cost, sales, revenue
- Cost, price, profit (correct)
- Profit, revenue, price
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