Y11 Accounting - C20 Manufacturing Accounts

What is the purpose of preparing a manufacturing account?

• To assess employee performance

• To calculate the total sales revenue

• To calculate how much it has cost to manufacture the goods

• To determine the profit margin

Which of the following is NOT considered a direct cost?

• Direct material

• Direct expenses

• Direct labour

• Factory overheads

What does prime cost include?

• Only direct labour

• Only direct material

• Factory overheads only

• Direct material, direct labour, and direct expenses

How is the cost of raw material used during the year calculated?

• Purchases - Opening inventory + Closing inventory

• Opening inventory - Purchases + Closing inventory

• Purchases + Closing inventory - Opening inventory

• Opening inventory + Purchases - Closing inventory

What is work in progress (WIP)?

• Goods that are fully completed

• Goods that are sold

• Goods that are partly completed

• Goods that are returned

What is the formula for calculating the cost of production?

• Prime cost + Factory overheads

• Prime cost - Direct material

• Direct material + Direct labour

• Factory overheads - Direct expenses

Which of the following is included in the profit and loss section of the income statement?

• Direct material costs

• Factory overheads

• Direct labour costs

• Selling and distribution expenses

What is the unit cost of making a product?

• Total inventory divided by the number of products

• Total expenses divided by the number of employees

• Total sales revenue divided by the number of units sold

• Total cost of production divided by the number of units produced

Which inventory is NOT typically shown in the statement of financial position for a manufacturing business?

• Sales revenue

• Finished goods

• Work in progress

• Raw material

What is included in factory overheads?

• Cost of raw materials

• Wages for factory workers

• Factory rent and utility bills

• Carriage costs for raw materials