ACC406 CH.2

Question 1

TOTAL PRODUCT COST =

Answer 1

DIRECT MATERIALS + DIRECT LABOUR + OVERHEAD

Question 2

UNIT PRODUCT COST =

Answer 2

TOTAL PRODUCT COST / NUMBER OF UNITS

Question 3

PRIME COST =

Answer 3

DIRECT MATERIALS + DIRECT LABOUR

Question 4

CONVERSION COST =

Answer 4

DIRECT LABOUR + MANUFACTURING OVERHEAD

Question 5

DIRECT MATERIALS USED IN PRODUCTION =

Answer 5

BEGINNING INVENTORY OF MATERIALS + PURCHASES - ENDING INVENTORY OF MATERIALS

Question 6

COST OF GOODS MANUFACTURED =

Answer 6

DIRECT MATERIALS USED IN PRODUCTION + DIRECT LABOUR USED IN PRODUCTION + OVERHEAD COST USED IN PRODUCTION + BEGINNING WIP INVENTORY - ENDING WIP INVENTORY

Question 7

COST OF GOODS SOLD =

Answer 7

BEGINNING FINISHED GOODS INVENTORY + COST OF GOODS MANUFACTURED - ENDING FINISHED GOODS INVENTORY

Question 8

Manufacturing Overhead (OH/MOH):

Answer 8

It refers to costs that incurred in the manufacturing process, not including direct materials and direct labour

Question 9

Direct Material (DM):

Answer 9

It is the type of material that is used to produce a certain good or service.

Question 10

Direct Labour (DL):

Answer 10

labour that is directly attributable to the goods and service that are being produced by a firm.