Section 2

Question 1

Direct Materials (DMC):

Answer 1

are those materials that become an integral part of the finished product and that can be traced to it.

Question 2

Indirect Materials:

Answer 2

are included as part of manufacturing overhead since it cannot be easily traced to a single product unit (cleaning supplies, glue, tape, oil, etc)

Question 3

Direct Labour (DLC):

Answer 3

can be easily traced to single product unit (ex: labour cost of assembly-line workers)

Question 4

Indirect Labour:

Answer 4

cannot be easily traced and treated as part of manufacturing overhead (supervisors, security personnel, etc)

Question 5

Manufacturing overhead:

Answer 5

are all manufacturing costs except DMC and DLC!
Only the costs associated with production facility (factory) operations are included in the manufacturing overhead category.

Question 6

Non-Manufacturing Costs:

Marketing and Selling Expenses

Answer 6

all costs necessary to secure customer orders and get the finished product or service to the customer.

Question 7

Non-Manufacturing Costs:

General and Administrative Expenses

Answer 7

all executive, organisational, and clerical costs associated with the general administration of an organisation.
(HR, public relations, legal, finance and controlling)

Question 8

Order-getting Costs:

Answer 8

advertising, sales travel, sales salaries or commisions.

Question 9

Order-filling Costs:

Answer 9

packing, shipping, costs of finished goods warehouses (logistic).

Question 10

Product Costs VS Period Costs

Answer 10

Manufacturing Costs VS Non-Manufacturing Costs