Table of Contents
- 1 Which types of inventories does a manufacturing business report on the balance sheet?
- 2 Which of the following costs are not included in finished goods inventory?
- 3 Which of the following is an example of a factory overhead cost?
- 4 Where is finished goods inventory reported?
- 5 What determines the difference between a product cost and a period cost quizlet?
- 6 Which two examples are period costs?
- 7 Which of the following is a part of manufacturing overhead?
- 8 Is direct labor a period cost?
- 9 What is the formula for direct labor cost?
- 10 Are period costs manufacturing overhead?
- 11 Are Selling Expenses manufacturing overhead?
- 12 What is prime cost and overhead cost?
Which types of inventories does a manufacturing business report on the balance sheet?
On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead are categorized as either materials inventory, work in process inventory, or finished goods inventory.
Which of the following costs are not included in finished goods inventory?
Option (b) chief financial officer salary is the correct answer because the chief financial officer salary is included in the office and administrative Expenses and not the cost of the finished goods inventory.
Which of the following is an example of a factory overhead cost?
Examples of factory overhead costs are: Production supervisor salaries. Quality assurance salaries. Materials management salaries.
Where is finished goods inventory reported?
The finished goods inventory is recorded on a company’s income statement as a short-term or current asset, as it is assumed that the finished goods will be sold within a year.
What determines the difference between a product cost and a period cost quizlet?
Product cost can also be considered the cost of the labor required to deliver a service to a customer. A period cost is any cost that cannot be capitalized into prepaid expenses, inventory, or fixed assets. A period cost is more closely associated with the passage of time than with a transactional event.
Which two examples are period costs?
Examples of period costs are:
- Selling expenses.
- Advertising expenses.
- Travel and entertainment expenses.
- Depreciation expense.
- General and administrative expenses.
- Executive and administrative salaries and benefits.
- Office rent.
Which of the following is a part of manufacturing overhead?
Indirect manufacturing labor is part of manufacturing overhead. Other examples of manufacturing overhead include equipment maintenance, factory supplies, and depreciation on the factory building. Office depreciation is part of SG&A expenses and is not included in the manufacturing overhead.
Is direct labor a period cost?
Examples of Product Costs and Period Costs Examples of product costs are direct materials, direct labor, and allocated factory overhead. Examples of period costs are general and administrative expenses, such as rent, office depreciation, office supplies, and utilities.
What is the formula for direct labor cost?
The labor cost per unit is obtained by multiplying the direct labor hourly rate by the time required to complete one unit of a product. For example, if the hourly rate is $16.75, and it takes 0.1 hours to manufacture one unit of a product, the direct labor cost per unit equals $1.68 ($16.75 x 0.1).
Are period costs manufacturing overhead?
Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
Are Selling Expenses manufacturing overhead?
Since direct materials and direct labor are usually considered to be the only costs that directly apply to a unit of production, manufacturing overhead is (by default) all of the indirect costs of a factory. Manufacturing overhead does not include any of the selling or administrative functions of a business.
What is prime cost and overhead cost?
Prime cost is cost of materials and labor involved in a production of commodity, excluding fixed costs. Overhead cost is the cost of on-going expenses such as rent,utility, and insurance.