Home › CMA Foundation › costaccounting › Cost Accounting Systems › Historical costing is best characterised as:
Historical costing is best characterised as:
AAscertainment of costs only AFTER they have been incurred
BCosting using only forecasted figures
CCosting without recording overheads
DPredetermined costing before production starts
Answer & Solution
Correct answer: A. Ascertainment of costs only AFTER they have been incurred
1. Historical costing accumulates costs after they have been incurred.
2. It is essentially a post-mortem of actual costs.
3. Comparison with standards (to assess efficiency) is only possible if standards exist.
_Source: ICMAI BoS CMA Foundation Paper 2 (Cost Accounting), Module 4 §4.1-4.2 (Methods & Systems of Costing), p. 297-308_