Manufacturing Account

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. The costs increase proportionately to the number of goods produced.

• 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

• Provision for unrealised profit

• Finished goods

• Raw Materials

How is prime cost calculated?

• Direct materials + indirect materials costs

• Direct materials + direct labour + other direct expenses

• Direct materials + direct labour + work-in-progress

• Direct materials + direct labour + overhead cost

What is direct factory wages?

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

• Wages of people employed in the factory to do machine maintenance

• Wages of people who deliver the goods to customers

• Wages of people who deliver the goods from suppliers

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.

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 of raw materials + Purchases of finished goods − Closing inventory of raw materials

• Opening inventory of raw materials + Purchases of raw materials + indirect materials

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

• Purchases of raw materials + opening inventory of work-in-progress - closing inventory of raw materials

What is the formula for cost of sales for a manufacturer?

• Opening inventory of raw materials + Cost of goods transferred – Closing inventory of raw materials

• Opening inventory of finished goods + Cost of Production – Closing inventory of finished goods

• Opening inventory of finished goods + Cost of goods transferred – Closing inventory of finished goods

• Opening inventory of work-in-progress + Cost of completed goods – Closing inventory of work-in-progress