Q2 - CH 2..MANUFACTURING COST CONCEPT & COMPONENTS

When costs are classified according to traceability to cost object, the cost of direct materials is considered as...

• Discretionary Cost

• Direct Cost

• Product Cost

• Committed Cost

Manufacturing costs that cannot be classified as direct materials or direct labour are classified as manufacturing overhead.

• TRUE

• FALSE

Prime costs are made up of...

• Direct Materials Cost + Direct Labour Cost

• Direct Labour Cost + Indirect Labour Cost

• Factory Overhead + Administrative Cost

• Selling & Distribution Cost + Administrative Cost

Raw materials that can be conveniently and directly associated with a finished product are called materials overhead.

• TRUE

• FALSE

The main cost that involved in the production of finished goods is known as..

• Conversion Cost

• Prime Cost

• Manufacturing Cost

• Indirect Cost

The cost that indirectly involved in the production of finished goods and cannot easily traced to the products is known as..

• Conversion Cost

• Period Cost

• Manufacturing Overhead

• Indirect Cost

Indirect materials and indirect labour are both inventoriable costs.

• TRUE

• FALSE

The cost that involved in converting raw materials into finished products is known as..,

• Prime Cost

• Conversion Cost

• Manufacturing Cost

• Period Cost

Period costs are not inventoriable costs.

• TRUE

• FALSE

The beginning work in process inventory appears on both the Statement of Financial Position and the Statement of Cost of Goods Manufacturing.

• TRUE

• FALSE