16 jan unit 1 and unit 2 costing basics

In a manufacturing business, costs are classified into

• production costs and service costs

• manufacturing and production costs

• production and non-production costs

• manufacturing costs and non-production costs

An example of direct expenses in a manufacturing company is

• fabrics

• materials

• rent

• royalty

The department which reaches out to the prospects and manages brands is

• service department

• marketing department

• production department

• administration department

XYZ Company uses the First-In-First-Out method to value direct material cost for production. Rising prices will lead to

• high cost of closing stock

• average cost of closing stock

• high direct material costs charged to production

• no different in direct material costs charged to production

Primary packing materials for manufactured goods will include

• drink bottles and drink cans

• jam, jam bottles and cartons

• chips, crisp packets and cardboard boxes

• chocolate bar wrappers and cardboard boxes

A company imported direct materials of $20,000, spent carriage inwards of $1,000 and the relevant insurance of $500 for the import. Calculate the cost of direct materials.

• $20,000

• $20,500

• $21,000

• $21,500

An example of administration overheads is bank

• charges

• loan interest

• interest revenue

• interest expense

When the work performed by a production worker cannot be connected to a specific production, the wages paid are considered as

• direct wages

• indirect wages

• financial overheads

• marketing overheads

Factory supervisors' salaries is a cost to

• direct wages

• marketing overheads

• production overheads

• administration overheads