Manufacturing accounting

Beginning work in process is equal to:

Cost of goods manufactured plus ending work in process minus total manufacturing costs incurred

The cost of wages paid to employees directly involved in the manufacturing process in converting materials into a finished product is classified as:

Direct labor cost

The purchases of raw materials account is debited when

Direct materials are purchased

The cost of a manufactured product consists of which of the following costs?

Direct materials, direct labor and factory overhead

Costs other than direct material and direct labor cost incurred in the manufacturing process are classified as:

Factory overhead cost

Cost of goods sold to a manufacturer is equal to the cost of goods manufactured plus:

Finished goods inventory beginning less ending finished goods inventory

Which of the following is not a factory overhead cost?

Materials used directly in the manufacturing process

Costs on the income statement for both a merchandiser and manufacturer would include:

Operating expenses

Another term often used to refer factory overhead is:

Period costs

Which of the following is the correct flow of manufacturing costs?

Raw materials, work in process, finished goods, cost of goods sold

Cost of goods manufactured is equal to

Total manufacturing cost plus beginning work in process less ending work in process inventory

Goods that are partially completed by a manufacturer are referred to as:

Work in process inventory

If the cost of direct materials is a small portion of total production cost, it may be classified as part of:

factory overhead

Product costs are all deducted from revenue in the period in which they are incurred.

false

Product costs are the costs of purchasing or manufacturing inventory and considered as assets until goods are sold.

false

All of the following would probably be considered a direct material except:

glue

A manufacturing entity usually has three separate inventories; raw materials, work in process and finished goods.

true

All costs and expenses incurred by a manufacturing entity are considered product costs rather than period costs.

true

Finished goods inventory is an asset, but inventories of raw materials and work in process are not considered assets until productions is completed.

true

Manufacturing costs are regarded as expenses of the current period and are expensed when incurred.

true

Manufacturing overhead includes all manufacturing costs except direct labor and direct materials.

true

Prime costs consist of direct materials and direct labor. Conversion cost is essentially direct labor.

true

Raw materials inventory refers to the direct materials on hand and available for use in the manufacturing process.

true

The wages paid to supervisors are an example of indirect labor.

true