ACC 112

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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


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