What is a cost center? And give one example
Any part of a business where costs are absorbed. For example a K9 unit in a police station
Administration expenses are found in the manufacturing account True or False?
False
The inventory found in the balance sheet contains Raw Materials, Finished goods and Work in Progress ending balances True or False
True
Selling and distribution expenses are found under the income statement of a manufacturing organization True or False
True
A manager overseeing the work of the machine employees is considered a form of direct labor true or false?
False
What is a unit cost?
All the cost included in making a single product
The production cost of goods completed is transferred to the income statement when doing manufacturing accounts is this statement true or false?
True
Depreciation on plant equipment, fuel and power, general factory expenses are all considered indirect manufacturing costs True or False?
True
ALL Material costs belongs in the manufacturing account true or false?
True
Give the name of any 1 element of costs for a business
Material costs, Labor Costs or Expenses
What is prime cost?
All the direct costs used in a manufacturing process
Financial Charges are found in the income statement of a manufacturing organization True or False?
True
Carriage outwards is part of the manufacturing costs of an organization True or False?
False
What is absorption costing?
Absorption costing is a method whereby overhead costs are charged to cost centres.
What is 1 objective of costing?
helps in decision making, controlling expenditure or planning and budgeting for the future
Where does royalties belong in the manufacturing account?
Under direct expenses
Define the term Work in Progress
Work that has not been completed in the previous period and therefore is the be completed in the future
What is an indirect cost and give one example?
Any cost that cannot be directly traced back to the production of a good or service and an example may be insurance, electricity costs or supervisor salary
If the total cost to produce 1000 Chairs was $100,000 what is the unit cost?
100,000 / 1000 =$100
What are the sections that make up the manufacturing account?
All direct costs (Prime costs) + Manufacturing Overheads (Indirect Costs) + Work In Progress
If Materials cost $1000, Machine worker wages cost $2000 and Direct expenses cost $1000 what is prime cost?
$4000 (1000+1000+2000