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    Question

    Which of the following is a notional cost?

    A Purchase cost Correct Answer Incorrect Answer
    B Freight inwards Correct Answer Incorrect Answer
    C Direct conversion costs Correct Answer Incorrect Answer
    D Standard cost Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Notional cost is the cost which is not actual. As per the accounting standards for inventory valuation, should be done using the standard cost or retail cost methods if it’s close to actual cost.

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