UTech IFACC Manufacturing Account

Select the statements that are true of Manufacturing accounts.

• The manufacturing account can be replaced with the Statement of comprehensive income in a manufacturing entity

• tracks the input costs associated with the manufacturing activity

• Done up before the statement of comprehensive income

• The manufacturing account preparation is compulsory

is the total of direct material, labour and expenses associated with production

(a)  

Goods not completed at the end of the period is classified as

• Closing Inventory

• Incomplete goods

• Work in Progress

• Outdated goods

The calculation of prime cost plus factory overheads, adjusted for any work in progress at the start and at the end of the year gives us the

• Expenses total

• Prime Cost

• Production overhead total

• Production cost

What is the formula for the value of material used in production?

• MAterial cost plus wages of production workers

• Production value less WIP

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

• Prime cost plus factory overheads

In the formula of cost of goods sold, what is deducted?

• Opening inventory

• Closing Inventory

• Purchases

• Direct materials

What is the formula for Prime Cost?

• All cost plus WIP

• Direct materials + carriage outwards + other indirect costs

• Direct materials + carriage inwards + other direct costs

An adjustment must be made for the unrealized portion of the factory profit, as well as for the closing stock of finished goods which is now being held at a marked-up value.

• True

• False

• Not necessary as it will eventually be accounted for

Provision for Unrealized Profits (PFUP) is done by either of the two concepts. Which are they?

• The Historical Cost Concept

• Prudence Concept only

• The Realization or Revenue Recognition Concept

• Profit utilization concept

A manufacturing firm’s costs were as follows:                     

   Raw materials      $55 000                       

Direct labour            $86 400                       

Factory overhead       $122 000                       

Depreciation of plant       $6 400                       

Administrative expense     $8 800                       

Selling & distribution expense $12 000           

There was closing work in progress of $ 12 400

What is the entity's cost of production?

• $120,000

• $266,200

• $238,600

• $257400