POA - Manu A/c Revision

For businesses involved in making products (production process), what type of account do they prepare?

• a. Manager's account

• b. Manual account

• c. Manufacturing account

• d. Main account

Answer explanation

Manufacturing businesses prepare a manufacturing account.

The manufacturing account is for use by?

• a. Customers

• b. Competitors

• c. Government

• d. Owners & managers of the business

Answer explanation

This is for internal use of the business only. Managers & owners will use the information presented in the account.

What is the purpose for manufacturing accounts?

• a. To determine profit

• b. To earn income

• c. To show the cost of producing goods.

• d. To help in decision making

What is the purpose for manufacturing accounts?

• a. To determine profit

• b. To earn income

• c. To show the cost of producing goods.

• d. To help in decision making

What are three categories of costs used to calculate the total cost of manufacturing?

• a. Direct costs

• b. Prime cost, Production cost & Total cost

• c. Fuel cost, other costs

• d. All costs

The production process begins with direct materials, direct labour & direct expenses. This cost category is called?

• a. Total cost

• b. Prime cost

• c. High cost

• d. Low cost

What does prime cost involve?

• a. Prime facts

• b. Direct costs

• c. Expensive costs

• d. Assets

Prime cost (direct materials, direct labour & direct expenses) plus what gives production cost?

• a. Indirect costs

• b. Indirect liabilities

• c. indirect income

• d. Indirect liabilities

Indirect costs are?

• a. Costs that are related directly to production

• b. Costs that relate to assets

• c. Costs that cannot be easily traced or linked to the items being manufactured

• d. Costs that are lost.

Another name for Indirect cost is?

• a. Fake cost

• b. Factory overheads

• c. Full cost

• d. Factory bills