Cost Theories Questions

Which of the following costs shall be considered conversion cost but(not)prime cost?

• Acquisition price of the main material of the product

• Depreciation of the administrative building.

• Salary of the factory supervisor, factory janitor and factory security guard.

• Employee benefits of the factory machine operator.

Which of the following instances will, decrease the cost of goods manufactured for the period ended?

• Increase in the finished goods during the period.

• Decrease in the direct labor cost from prior year.

• Increase in the work in process inventory during the period.

• Decrease in the raw materials inventory during the period

Which of the following costs shall be considered prime cost, conversion cost and product cost at the same time?

• Acquisition price of the main material of the product.

• Depreciation of the machinery used to manufacture the product.

• Salary of the factory supervision, factory janitor and factory security guard.

• Employee benefits of the factory machine operator.

Which of the following costs shall be considered prime cost, conversion cost and product cost at the same time?

• Acquisition price of the main material of the product.

• Depreciation of the machinery used to manufacture the product.

• Salary of the factory supervision, factory janitor and factory security guard.

• Employee benefits of the factory machine operator.

What are prime costs?

• The first costs incurred on a job

• Indispensable as distinguished from avoidable costs

• Direct materials and direct labor

• Costs incurred on joint products before the split off point

Prime cost and conversion cost share what common element of total cost?

• Direct material

• Direct labor

• Variable overhead

• Fixed overhead first costs incurred on a job

Direct materials are

• Prime cost and conversion cost

• Conversion cost and manufacturing cost

• Prime cost and manufacturing cost

• Prime cost, conversion cost and manufacturing cost

Indirect materials are

• Prime cost

• Fixed cost

• Irrelevant cost

• Factory overhead cost

Direct labor is a

• Nonmanufacturing cost

• Conversion cost

• Prime cost

• Period cost

Indirect labor includes wages paid to

• Supervisor in a factory

• Factory stores clerk and timekeeper in a factory

• Factory crane operator

• All of these