Manufacturing Accounts

What is not part of the prime cost of a manufacturing business?

• raw materials

• royalties

• wages of factory supervisors

• wages of production workers

The value of Thato’s work in progress increased during the year. This was recorded in his financial statements. How did this affect the cost of production and the cost of sales?

• cost of

  production decreased

  cost of sales decreased

• cost of

  production decreased

  cost of sales no effect

• cost of

  production increased

  cost of sales increased

• cost of

  production increased

  cost of sales increased

A manufacturer’s work in progress at the start of the year was valued at $850. At the end of the year it was valued at $10 200.

What was the effect of this increase on the cost of production and the cost of sales?

• cost of

  production decrease

  cost of

  sales decrease

• cost of

  production decrease

  cost of

  sales increase

• cost of

  production increase

  cost of

  sales decrease

• cost of

  production increase

  cost of

  sales increase

A manufacturing company provided the following information. What was the prime cost of manufacturing?

• $186 000

• $261 000

• $293 000

• $380 000

The following costs were incurred by a clothing manufacturer.

1 purchase of fabric

2 purchase of buttons

3 repairs to sewing machine

4 wages of factory supervisors

5 wages of sewing machinists

Which costs are indirect costs?

• 1, 2 and 5

• 1, 4 and 5

• 2 and 3

• 3 and 4

A manufacturer calculated the cost of production for the year at $57 000.

It was found that lighting and heating, $2000, had been omitted from the financial statements.

Lighting and heating is allocated 75% to the factory and 25% to the offices.

What was the correct cost of production?

• $55 500

• $56 500

• $57 500

• $58 500

What would be included in the statement of financial position of a manufacturing business but not a wholesale or retail business?

• cash

• office equipment

• trade receivables

• work in progress

A manufacturing business provided the following information for the year ended

30 November 2019

factory supervisor’s salary 25 000

factory power 5 000

machinery depreciation 11 000

machinery operators’ wages 29 000

raw materials consumed 82 000

What was the total of the direct costs?

• $111 000

• $116 000

• $127 000

• $152 000