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WorksheetsQ2 - CH 2..MANUFACTURING COST CONCEPT & COMPONENTS
Total questions: 45
Worksheet time: 45mins
When costs are classified according to traceability to cost object, the cost of direct materials is considered as...
Discretionary Cost
Direct Cost
Product Cost
Committed Cost
Manufacturing costs that cannot be classified as direct materials or direct labour are classified as manufacturing overhead.
TRUE
FALSE
Prime costs are made up of...
Direct Materials Cost + Direct Labour Cost
Direct Labour Cost + Indirect Labour Cost
Factory Overhead + Administrative Cost
Selling & Distribution Cost + Administrative Cost
Raw materials that can be conveniently and directly associated with a finished product are called materials overhead.
TRUE
FALSE
The main cost that involved in the production of finished goods is known as..
Conversion Cost
Prime Cost
Manufacturing Cost
Indirect Cost
The cost that indirectly involved in the production of finished goods and cannot easily traced to the products is known as..
Conversion Cost
Period Cost
Manufacturing Overhead
Indirect Cost
Indirect materials and indirect labour are both inventoriable costs.
TRUE
FALSE
The cost that involved in converting raw materials into finished products is known as..,
Prime Cost
Conversion Cost
Manufacturing Cost
Period Cost
Period costs are not inventoriable costs.
TRUE
FALSE
The beginning work in process inventory appears on both the Statement of Financial Position and the Statement of Cost of Goods Manufacturing.
TRUE
FALSE
In calculating gross profit for a manufacturing company, the cost of goods manufactured is deducted from net sales.
TRUE
FALSE
Raw materials inventory shows the cost of completed goods available for sale to customers.
TRUE
FALSE
Both direct materials and indirect materials are..
raw materials.
manufacturing overhead.
merchandise inventory.
sold directly to customers by a manufacturing company.
The work of factory employees that can be physically and directly associated with converting raw materials into finished goods is..
manufacturing overhead.
indirect materials.
indirect labour.
direct labour.
Which one of the following would not be classified as manufacturing overhead?
Indirect labour.
Direct materials
Insurance on factory building
indirect materials.
Manufacturing costs include..
direct materials and direct labour only.
direct materials and manufacturing overhead only.
direct labour and manufacturing overhead only.
direct materials, direct labour, and manufacturing overhead.
Which one of the following is not a direct material?
A tire used for a lawnmower.
The plastic used in the covered case for a home PC.
The steel used in the manufacturing of steel-radial tires.
Lubricant for a ball-bearing joint for a large crane.
Which one of the following is not a cost element in manufacturing a product?
Manufacturing overhead
Direct materials
Office salaries
Direct labour
A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)..
period cost.
indirect material.
direct material.
miscellaneous expense.
The wages of a janitor in the factory would be classified as..
a period cost
direct labour cost
indirect labour cost
compliance costs.
Which one of the following is not considered as material costs?
Partially completed motor engines for a motorcycle plant
Bolts used in manufacturing the compressor of an engine
Rivets for the wings of a new commercial jet aircraft
Lumber used to build tables
Which of the following is not a manufacturing cost category?
Cost of goods sold
Direct materials
Direct labour
Manufacturing overhead
As current technology changes manufacturing processes, it is likely that direct..
labour will increase.
labour will decrease.
materials will increase.
materials will decrease.
Which of the following is not classified as direct labour?
Bottlers of Pepsi
Copy machine operators at a copy shop
Production supervisor
Bakers in a bakery
Cotter pins and lubricants used irregularly in a production process are classified as..
miscellaneous expense.
direct materials.
indirect materials.
nonmaterial materials.
The product cost that is most difficult to associate with a product is..
direct materials.
direct labour.
manufacturing overhead.
advertising.
Manufacturing costs that cannot be classified as either direct materials or direct labour are known as..
period costs.
nonmanufacturing costs.
manufacturing overhead.
selling and administrative expenses.
Which one of the following is an example of a period cost?
Purchases cost of raw materials on account
Workers' compensation insurance on factory workers' wages allocated to the factory
A box cost associated with computers
A manager's salary for work that is done in the corporate head office
Which one of the following costs would not be inventoriable?
Period costs
Factory insurance costs
Indirect materials
Indirect labour costs
Which of the following are period costs?
Raw materials
Direct materials and direct labor
Direct labor and manufacturing overhead
Selling expenses
A manufacturing company calculates the cost of goods sold as follows: .....(FG = finished goods)
Beginning FG inventory + cost of goods purchased – ending FG inventory.
Ending FG inventory – cost of goods manufactured + beginning FG inventory.
Beginning FG inventory – cost of goods manufactured – ending FG inventory.
Beginning FG inventory + cost of goods manufactured – ending FG inventory.
The cost of goods manufactured is calculated as follows:
(WIP = work in process)
Beginning WIP + direct materials used + direct labour + manufacturing overhead + ending WIP.
Direct materials used + direct labour + manufacturing overhead – beginning WIP + ending WIP.
Beginning WIP + direct materials used + direct labour + manufacturing overhead – ending WIP.
Direct materials used + direct labour + manufacturing overhead – ending WIP – beginning WIP.
Cost of goods sold..
only appears on merchandising companies' Statements of Comprehensive Income
only appears on manufacturing companies' Statements of Comprehensive Income
appears on both manufacturing and merchandising companies' Statements of Comprehensive Income
is calculated exactly the same for merchandising and manufacturing companies.
The subtotal, "Cost of goods manufactured" appears on..
a merchandising companies' Statements of Comprehensive Income
both manufacturing and a merchandising companies' Statements of Comprehensive Income
neither manufacturing nor a merchandising companies' Statements of Comprehensive Income
a manufacturing companies' Statements of Comprehensive Income
Which one of the following represents a period cost?
Sales Manager's salary and benefits
Overhead allocated to the manufacturing operations
Labour costs associated with quality control
Fringe benefits associated with factory workers
Depreciation on office furniture is considered to be a (an).. -
Administrative costs
Selling and distribution costs
Overhead costs
Negative asset
Factory insurance is considered to be a (an).. -
Overhead costs
Prime costs
Administrative costs
Operating income
Prime costs are made up of ..-
Raw materials costs + direct labour costs
Direct labour costs + Indirect labour costs
Factory overheads + administrative costs
Selling and distribution costs + administrative costs
The formula for calculating the cost of goods sold for manufacturing company is ..-
Finished goods at beginning of the year + cost of finished goods produced - finished goods at end of the year
Total manufacturing costs + work-in-progress at beginning of the year - work-in-progress at end of the year
Finished goods at beginning of the year + cost of sales - finished goods at end of the year
Finished goods at beginning of the year - cost of finished goods produced - finished goods at end of the year
When classified according to traceability to cost object, the cost of raw materials is considered a:
Discretionary cost
Direct cost
Product cost
Committed cost
The costs that are reported as expenses in the Statement of Comprehensive Income when they are incurred.
Product costs
Operating expenses
Period costs
Manufacturing costs
Which of the following are manufacturing costs?
Overhead and marketing costs
Direct raw material costs and direct labour costs
Administrative and direct labour costs
Marketing and administrative costs
Which of the following statements about direct and indirect cost classification is not true?
Indirect costs are always traceable
The direct and indirect classification depends on the choice of the cost object
Indirect costs are always allocated
The design of operations affects the direct and indirect classification
Which of the following would NOT be classified as product cost?
Direct Materials Cost
Direct Labour Cost
Sales Commissions
Indirect Materials
A manufacturing process requires a small amount of glue. The glue used in the profuction process id classified as..?
Period Cost
Indirect Material Cost
Direc Material Cost
Miscellaneous Expense
