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