AA025 CHAPTER 1-3

Direct materials:

• are used to determine total manufacturing overhead

• are used to determine total inventoriable products costs

• cannot be separately and conveniently traced through the manufcturing process to finished goods inventory

• must not become part of the finished product

Which of the following is not manufacturing overhead cost

• salaries of production supervisors

• insurance on factory equipment

• materials used directly in the manufacturing process of the product

• property tax on factory building

Indirect labour is a:

• non-manufacturing cost

• raw material cost

• product cost

• period cost

A cost of goods manufactured schedule shows beginning and ending inventories for:

• raw materials, work in process and finished goods

• work in process only

• raw materials only

• raw materials and work in process

The ideal order quantity a company should purchase for its inventory given a cost set of production, demand rate, and other variables is known as:

• Reorder point

• Anticipation stock

• Economic order quantity

• Inventory control

Just-in-time inventory management is when:

• Customers have a short period of time to order their stock

• Stock is delivered quickly

• Stock is ordered just in time for when it is required

• The business does not have to order any stock

Work-in progress means goods which are

• ready for sale

• partially completed

• completed

• ready for packing

What is direct factory wages?

• Wages of the people employed in the factory making the goods.

• Wages of people who deliver the goods to customers

• Wages of people employed in the factory to do machine maintenance

• Wages of people who deliver the goods from suppliers

What is the formula for cost of material consumed?

• Opening inventory of raw materials + Purchases of finished goods − Closing inventory of raw materials

• Opening inventory of raw materials + Purchases of raw materials + indirect materials

• Purchases of raw materials + opening inventory of work-in-progress - closing inventory of raw materials

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

It is the cost of products that have been completed and are waiting to be sold to customers.

• Finished goods

• Work in process

• Cost of goods sold

• Manufacturing cost