Cost audit for Materials covers : 

(A) Goods inward procedure.

(B) Methods of calculating standard cost variance.

(C) Classification of overhead.

(D) Accounting for scrap, wastage, materials transfers

(E) Accounting treatment of under or over absorption 

Choose the most appropriate answer from the options given below:

Cost audit for Materials covers Goods inward procedure and Accounting for scrap, wastage, materials transfers.

A cost audit represents the verification of cost accounts and checking on the adherence to the cost accounting plan. Cost audit ascertains the accuracy of cost accounting records to ensure that they are in conformity with cost accounting principles, plans, procedures, and objectives.

A cost audit comprises the following;

• Verification of the cost accounting records such as the accuracy of the cost accounts, cost reports, cost statements, cost data, and costing technique
• Examination of these records to ensure that they adhere to the cost accounting principles, plans, procedures, and objective
• To report to the government on optimum utilization of national resources.