A __________ is part of the annual financial statements and is used to calculate the cost of goods produced.

• Manufacturing account

• Prime cost

• Cost of production

• Work in progress

_______ is the total of the direct materials, direct labour and direct expenses. It is the cost of the essentials necessary for production.

• Manufacturing account

• Prime cost

• Cost of production

• Work in progress

__________ is prime cost plus factory overheads, adjusted for any work in progress at the start and at the end of the year. It is the total cost of manufacturing the goods completed.

• Manufacturing account

• Prime cost

• Cost of production

• Work in progress

__________ is the goods which are partly completed at the end of the financial year.

• Work in progress

• Cost of production

• Prime cost

• Manufacturing account

How is prime cost calculated?

• Direct materials + carriage outwards + other direct costs

• Direct materials + carriage inwards + other direct costs

• Direct materials + carriage inwards + indirect expenses

• Direct materials + carriage outwards + indirect expenses

What is direct factory wages?

• Wages of the people employed in the factory making the goods.

• Wages of people employed in the factory but who are not involved in the actual production process

What is indirect factory wages?

• Wages of people employed in the factory but who are not involved in the actual production process.

• Wages of the people employed in the factory making the goods.

• Royalties and hire of a special machine, or any other suitable direct expense.

• Total of the direct materials, direct labour and direct expenses. It is the cost of the essentials necessary for production.

State an alternative term for factory overheads.

• Indirect factory expenses.

• Prime cost

• Direct labour

• Direct expenses

What is the formula for cost of material consumed?

• Opening inventory + Purchases of raw materials + Carriage inward − Closing inventory

• Cost of materials consumed + Direct wages

• Prime cost + Factory overheads

What is the formula for cost of sales?

• Opening inventory + Purchases – Closing inventory

• Prime cost + factory overheads

• Gross profit + income - expenses