Question 6
In a manufacturing plant, two purchase components P1 and P2 and a resource R1 are required to assemble a product. The cost of the assembly is calculated by using the standard costing method. The work definition and resource rates of the assembly have been defined as required.
A cost accountant is estimating cost of the assembly, analyzing rolled-up costs before finally publishing estimates as frozen standards to cost accounting by using a cost planning scenario. While reviewing rolled up costs, the extended costs of purchase components are not included in a rolled-up scenario.
Identify the reason.
Purchase components P1 and P2 are not associated with Material cost plan of the cost planning scenario.
Costs for purchase components P1 and P2 are not defined in cost accounting.
Create Accounting was not initiated.
Create Accounting Distributions was not initiated.
Correct answer: D