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WorksheetsManufacturing Accounts
Total questions: 25
Worksheet time: 13mins
A __________ is part of the annual financial statements and is used to calculate the cost of goods produced.
Manufacturing account
Prime cost
Cost of production
Work in progress
_______ is the total of the direct materials, direct labour and direct expenses. It is the cost of the essentials necessary for production.
Manufacturing account
Prime cost
Cost of production
Work in progress
__________ is prime cost plus factory overheads, adjusted for any work in progress at the start and at the end of the year. It is the total cost of manufacturing the goods completed.
Manufacturing account
Prime cost
Cost of production
Work in progress
__________ is the goods which are partly completed at the end of the financial year.
Work in progress
Cost of production
Prime cost
Manufacturing account
How is prime cost calculated?
Direct materials + carriage outwards + other direct costs
Direct materials + carriage inwards + other direct costs
Direct materials + carriage inwards + indirect expenses
Direct materials + carriage outwards + indirect expenses
What is direct factory wages?
Wages of the people employed in the factory making the goods.
Wages of people employed in the factory but who are not involved in the actual production process
What is indirect factory wages?
Wages of people employed in the factory but who are not involved in the actual production process.
Wages of the people employed in the factory making the goods.
Royalties and hire of a special machine, or any other suitable direct expense.
Total of the direct materials, direct labour and direct expenses. It is the cost of the essentials necessary for production.
State an alternative term for factory overheads.
Indirect factory expenses.
Prime cost
Direct labour
Direct expenses
What is the formula for cost of material consumed?
Opening inventory of raw materials + Purchases of raw materials + Carriage inward of raw materials − Closing inventory of raw materials
Cost of materials consumed + Direct wages
Prime cost + Factory overheads
What is the formula for cost of sales?
Opening inventory of finished goods + Purchases finished goods – Closing inventory finished goods
Prime cost + factory overheads
Gross profit + income - expenses
What is direct material cost?
The cost of the raw material being used.
A form of direct costs that can be directly traced to the manufacture of an item,
The cost of labour that can be directly traced to the manufacture of an item
Which of the following elements of a manufacturing account matches the definition below:
The raw materials actually used to manufacture the product (e.g. cloth used to produce shirts, flour used to produce bread)
Direct materials
Direct wages
Indirect materials
Direct expenses
Which of the following elements of a manufacturing account matches the definition below:
The wages of those workers actually engaged in the manufacturing process (e.g. wages of a sewing machine operator)
Direct materials
Direct wages
Indirect wages
Profit on manufacture
Which of the following elements of a manufacturing account matches the definition below:
Expenses which can be traced directly to the units manufactured. This can include royalties and hire of specialist equipment.
Direct wages
Direct materials
Direct expenses
Indirect materials
Which of the following elements of a manufacturing account matches the definition below:
Fees that must be paid to other persons for the right to produce their products or to use their processes.
Direct expenses
Royalties
Hire of specialist equipment
Prime cost
How is Prime Cost calculated on a manufacturing account?
Prime Cost = Direct Materials + Direct Wages + Direct Expenses
Prime Cost = Direct Materials - Direct Wages - Direct Expenses
Prime Cost = Direct Materials x Direct Wages
Prime Cost = Direct Materials / Direct Expenses
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
What is the general rule for dealing with Work-in-Progress on a manufacturing account?
Add opening WIP and closing WIP
Subtract opening WIP and add closing WIP
Add opening WIP and subtract closing WIP
Subtract opening WIP and closing WIP
Manufacturing firms like to compare their cost of manufacture with the wholesale cost of their output. Why do they do this?
To see whether it has been more or less profitable to manufacture the products rather than purchase them
To report to managers on the quality of their products
To apportion costs to different areas of the business
To investigate how many units are required to breakeven
Prime cost include
Cost of Raw material consumed
Cost of sales
Cost of production
Work-in-progress
It is the cost of products being processed and not yet completed at end of period.
Finished goods
Work in process
Raw materials
Factory overhead
Supplies
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
Raw materials
Manufacturing cost
Which of these are an example of a Direct Cost?
Royalties
Salary of factory manager
Depreciation of Factory Machinery
Factory Insurance
Which of these is not an example of a Factory Overhead?
Depreciation of factory Machinery
Factory Rates
Factory Insurance
Depreciation of office machinery
When is a manufacturing account created?
Before the income statement
After the income statement
As part of the income statement
