Assignment from the Textbook Essay
For each statement, indicate the accounting term described, or answer “None” if the statement does not correctly describe any of the terms. A. The preparation and use of accounting information designed to assist managers in planning and controlling the operations of a business. Management Accounting b. All manufacturing costs other than direct materials used and direct labor. Manufacturing Overhead c. Direct materials and direct labor used in manufacturing a product. “None” – the definition describes a prime cost d. A manufacturing cost that can be traced conveniently and directly to manufactured units of product.
Cost of Goods Sold e.
The account debited at the time that the Manufacturing Overhead account is credited. “None” f. The amount transferred from the Work in Process Inventory account to the Finished Goods Inventory account. Costs of finished goods manufactured g. Costs that are debited directly to expense accounts when the costs are incurred. Period Costs Exercise 16. 2 – Basic Types of Manufacturing Costs Into which of the three elements of manufacturing cost would each of the following be classified? A.
Tubing used in manufacturing bicycles. Direct Materials b. Wages paid by an automobile manufacturer to employees who test- drive completed automobiles.
Direct Labor c. Property taxes on machinery. Manufacturing Overhead d. Gold bullion used by a jewelry manufacturer. Direct Materials e. Wages of assembly-line workers who package frozen food. Direct Labor f. Salary of plant superintendent. Manufacturing Overhead g. Electricity used in factory operations. Manufacturing Overhead h. Salary of a nurse in a factory first-aid station. Manufacturing Overhead Exercise 16. 3 – Product Costs and Period Costs Indicate whether each of the following should be considered a product cost or a period cost. If you identify the item as a product cost, also indicate whether it is a direct or indirect cost.