T1& 2 (Q)-Introduction
The three cost elements ordinarily included in the inventoriable cost of a manufactured product are direct materials, direct labor, and marketing costs.
Depreciation on manufacturing equipment is a period cost.
3. Salaries and wages incurred in the factory would be product costs
Commissions paid to salespersons are a variable selling expense.
5. Variable costs are costs that vary, in total, in direct proportion to changes in the volume or level of activity.
Multiple Choice Questions
The variable portion of the cost of electricity for a manufacturing plant is a:
| |Conversion cost |Period cost | |A) |Yes |No |
|B) |Yes |Yes |
|C) |No |Yes |
|D) |No |No |
An example of a direct labor cost is wages paid to a:
| |Factory machine operator |Supervisor in a factory | |A) |No |No | |B) |No |Yes | |C) |Yes |Yes | |D) |Yes |No |
Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table?
The amount paid to the individual who stains the table.
The commission paid to the salesperson who sold the table.
The cost of glue used in the table.
The cost of the wood used in the table.
Which of the following statements is correct in describing manufacturing overhead costs?
Manufacturing overhead when combined with direct material cost forms conversion cost.
Manufacturing overhead consists of all manufacturing cost except for prime cost.
Manufacturing overhead is a period cost.
Manufacturing overhead when combined with direct labor cost forms prime cost.
When volume or level of activity decreases, variable costs will:
increase per unit.
increase in total.
decrease in total.
decrease per unit.
Within the relevant range:
variable cost per unit decreases as production decreases.
fixed cost per unit increases as production decreases.
fixed cost per unit decreases as production decreases.
variable cost per unit increases as production decreases.
During the month of May, direct labor cost totaled $10,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during May were $86,000, the manufacturing overhead was:
Last month a manufacturing company had the following operating results:
|Beginning finished goods inventory |$84,000 | |Ending finished goods inventory |$71,000 | |Sales |$505,000 | |Gross margin |$63,000 |
What was the cost of goods manufactured for the month?
Using the following data for April, calculate the cost of goods manufactured:
|Direct materials |$23,000 | |Direct labor...
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