Question

5a)

Which of the following statements is true?

	a.	Advertising is a period cost and a plant manager’s salary is a manufacturing overhead cost.
	b.	Advertising is a product cost and a plant manager’s salary is a period cost.
	c.	Advertising is a product cost and a plant manager’s salary is a manufacturing overhead cost.
	d.	Advertising is a period cost and a plant manager’s salary is a period cost.

5b)

Which beginning and ending inventories appear on a cost of goods manufactured schedule?

	a.	work in process only
	b.	raw materials and work in process only
	c.	raw materials only
	d.	raw materials, work in process, and finished goods

5c)

Which one of the following would not be classified as manufacturing overhead?

	a.	direct materials
	b.	indirect materials
	c.	indirect labour
	d.	insurance on factory building

5d)

Which statement is true?

	a.	Total units accounted for = beginning Work in Process – units transferred out.
	b.	Beginning Work in Process + ending Work in Process = total units accounted for.
	c.	Total units accounted for = units in ending Work in Process + units transferred out.
	d.	Ending Work in Process – equivalent units = total units accounted for.

5e)

Snapps, Inc. uses a process cost system with a weighted-average method. What amount will always be the same as the number of units to be accounted for in a department?

	a.	Units in the beginning inventory plus the units started or transferred into the department.
	b.	Ending inventory plus the units started or transferred into the department.
	c.	Number of units started or transferred into the department.
	d.	Number of equivalent units for conversion costs.

Answer 1

5A)

a.Advertising is a period cost and a plant manager’s salary is a manufacturing overhead cost.

Period cost is indirect cost like selling expenses, Advertisement expense etc

Plant manager salary is directly attributable to Manufacturing overhead

5b)

b.

raw materials and work in process only

In cost of goods manufactured schedule oly RM and WIP will consider. There is no importance to Finished goods

5c) Direct Material

It is prime cost that which directly attributable

5d)

Total units accounted for = units in ending Work in Process + units transferred out.