AA025 QUIZ TOPIC 3

Factory insurance is considered to be a -

• Overhead costs

• Prime costs

• Administrative costs

• Operating income

Customs duties increase -

• Raw material costs

• Overhead costs

• Selling and distribution costs

• Sales

Which of the following are examples of indirect costs? (There are THREE correct answers to select!)

• Factory heat and light

• Factory manager salary

• Factory rent and rates

• Machine operator wages

This account is used to summarize the cost of direct materials, direct labor and factory overhead incurred in producing the goods.

• Manufacturing costs

• Manufacturing overhead

• Cost of goods manufactured

• Cost of goods sold

This cost represents the total expenses incurred in the production of goods that are not yet completed.

• Direct materials

• Cost of goods sold

• Finished goods

• Work in process

Which of the following is included in the calculation of total manufacturing costs?

• Direct labor + Indirect materials

• Direct materials + Direct labor + Factory overhead

• Direct materials + Selling expenses

• Administrative costs + Selling expenses

Also known as non-manufacturing cost

• Product cost

• Period cost

• Inventoriable cost

• Manufacturing cost

Costs of raw materials purchase will be recorded in the

• Statement of cost of good manufactured

• Statement of comprehensive income

• Statement of financial position

What is the best description of overheads?

• Indirect costs which are not easily identifiable in a product

• Indirect costs which are easily identifiable in a product

• Direct costs which are not easily identifiable in a product

• Direct costs which are easily identifiable in a product

What is NOT an example of an overhead cost?

• Insurance of vans

• Administration expenses

• Indirect materials

• Wages of operators