ACC 112
A lawn mower manufacturer would classify wheels as which type of cost?
Þ direct materials
The following are indirect costs
Þ factory equipment depreciation Þ materials not traceable to specific items utilities on factory building
Which of the following is an example of a factory overhead cost?
Þ factory heating and lighting cost
Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as
Þ factory overhead cost
The following would most likely be considered an indirect material by a manufacturer:
glue
This must be true in order for materials to be classified as direct materials:
Þ They must be an integral part of the finished product and a significant portion of the total product cost.
The following is an example of direct labor
Þ machine operators
Indirect labor and indirect materials are classified as
Þ factory overhead and product costs
Managers use managerial accounting information for the following purposes:
Þ to support strategic planning decisions Þ to analyze the performance of a company's operations Þ to determine the cost of manufacturing a product
A plant manager's salary is an
indirect cost
In order to be useful to managers, managerial accounting reports should possess the following characteristics:
Þ be prepared to report information for any unit of the business to support decision making Þ provide objective measures of past operations and subjective estimates about future decisions Þ be provided at any time management needs information
The cost of changing direct materials into a finished manufactured product is called
Þ conversion cost
This is an example of direct materials cost for an automobile manufacturer
Þ cost of interior upholstery
The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished products is classified as
Þ direct labor cost
A lawn mower manufacturer would classify grease for wheel axles as which type of cost?
Þ factory overhead
Accounting designed to meet the needs of decision makers inside the business is
Þ managerial accounting
The following items are classified as part of factory overhead:
Þ production supervisors' salaries Þ factory supplies used Þ amortization of manufacturing patents