Costing, which explains how and when scrap affects operating income of company is classified as

A inventory costing
B conversion costing
C normal scrap costing
D abnormal scrap costing

Correct Answer: inventory costing

Costing, which explains how and when scrap affects operating income of company is classified as inventory costing. Inventory is merchandise purchased by merchandisers (retailers, wholesalers, distributors) for the purpose of being sold to customers. The cost of the merchandise purchased but not yet sold is reported in the account Inventory or Merchandise Inventory.
Bissoy MCQ
#Commerce #Costing

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