Manufacturing Part I Flashcards
A manufacturing concern still needs to prepare an income statement even if a schedule of cost of goods manufactured and sold had been prepared. True or False?
True
Labor costs may be part of manufacturing overhead costs. True or False?
True
Generally, companies which perform substantial alteration of goods are considered as manufacturing. True or False?
True
A manufacturing company cannot sell partially-completed goods. True or False?
False. They can sell partially-completed goods
The cost of direct materials used increases total manufacturing costs. True or False?
True
For a manufacturing concern, inventories which remain on hand as at reporting date are considered as assets. True or False?
True
There are different types of costs for different purposes. True or False?
True
The company’s applied manufacturing overhead cost is computed by multiplying actual rate by estimated activity levels. True or False?
False. Estimated not actual
All operating expenses are classified as period costs. True or False?
True
A manufacturing concern cannot have a higher Finished Goods Inventory ending balance than its Work-in-Process Inventory. True or False?
False. They can
The concept of fixed and variable costs is only applicable to manufacturing concern. True or False?
False. It can be applicable to any business type of concern
A material can be classified as indirect, even if the said material can be traced to the final product. True or False?
True
A manufacturing concern cannot have income other than sales. True or False?
False. They can have inventory, etc.
A functional format income statement is more applicable to service and merchandising forms of business organization. True or False?
False. Why?
All employees’ salaries are considered as product costs in a manufacturing concern. True or False?
False. Some are product costs (DL) and some are period costs (AC)
Depreciation on store furniture is an example of an indirect product cost in a manufacturing concern. True or False?
False. Period cost under admin costs
As cost objects expand in scope, more costs become direct than indirect. True or False?
True
A company can only have variable or fixed costs, but not both. True or False?
False. They can have both
Manufacturing is superior over service and merchandising types of business.
False. No type of business is superior than the other
Period costs are presented in the income statement. True or False?
True
The cost of sales section in a merchandising concern’s income statement is typically longer than that of a manufacturing concern. True or False?
False. Manufacturing has a longer one than merchandising
Unlike merchandising, manufacturing companies produce the goods that they sell. True or False?
True
Cost behavior can be used to classify costs in the income statement. True or False?
True
Manufacturing has a longer accounting cycle than a merchandising type of business.
