Manufacturing Costs

Question 1

What are THREE FACTORS OF PRODUCTION?

Answer 1

1) Direct Material
2) Direct Labor
3) Overhead- Not traceable

Question 2

What are prime costs?

Answer 2

Direct material cost + Direct Labor Costs

Question 3

What are conversion costs?

Answer 3

Direct labor costs + Factory O/H Costs

Question 4

What is actual costing?

Answer 4

Simplest and most accurate method and waits until all the costs are known

AQ X AP

Question 5

What is normal costing?

Answer 5

Modernly simple and moderately accurate method where direct materials and direct labor are traced to WIP when costs become known.

AQ X POR (Predetermined O/H Rate)

Question 6

What is standard costing?

Answer 6

Costing method that uses predetermined, estimated rates and quantities to record both direct costs and O/H

SQA X SP