Quiz 2 CTB - Unit 2

Stocks in a factory refers to ________

• work-in-progress

• raw materials

• finished goods

• all of the above

Example of costs associated with obtaining inventory are

• insurance and security

• audit and stock recording

• freight and insurance

• warehouse equipment and rent

Pilferage losses are considered as

• abnormal loss

• admin overhead expense

• marketing overhead expense

• normal loss

When prices are falling, the value of the closing stock will be lowest under _____ method.

• LIFO

• Weighted average

• FIFO

• None of the above

Abnormal losses are written off as part of _______

• direct material cost

• production overhead expense

• admin overhead expense

• marketing overhead expense

Find the cost of direct materials used in production.

Direct materials from stores $20,000

Components purchased $5,000

Raw materials transferred-in $1,000

Raw materials returned to suppliers $500

Raw materials transferred-out $500

Consumable materials used $1,000

• $20,000

• $25,000

• $26,000

• None of the above

Why are raw materials returned to the store?

• excessive withdrawal

• wrong items drawn

• items are damaged

• all of the above

Normal loss is expected loss that ______

• cannot be avoided

• does not occur frequently

• should have been prevented

• none of the above

Normal losses are written off against __________ overheads

Losses resulting from fire that is not insured is an example of _______ loss.