Which of the following correctly describes the cost of goods manufactured (COGM)
ID: 2488523 • Letter: W
Question
Which of the following correctly describes the cost of goods manufactured (COGM)? It is the total cost of goods started during the period, but not yet complete as of the end of the period. It is the sum of the direct materials used in production, the direct labor coat incurred and the manufacturing overhead incurred for the period. It represents the total cost of goods transferred out of work-in-process inventory and into finished goods inventory. It consists of all manufacturing costs other than direct materials used in production and direct labor costs incurred during the period. Hico Bottling Company pays its production manager a salary of $5,000 per month. Salespersons are paid strictly on commission, at $2 fox each ease of product sold. The salespersons' commissions are an example of a variable cost. a fixed cost. a mixed cost none of the above A firm uses a job-order cost system and allocates manufacturing overhead based on direct labor hours. The following information was available for the current year What was the firm's manufacturing overhead application rate for the year? $16.00 $20.00 $18.00 $22.50 Which of the following is TRUE regarding activity-based costing? It uses fewer cost pools and allocation bases than more traditional cost systems It is often costly and time-consuming to set up It cannot be used for internal decision making It is required to be used under Generally Accepted Accounting Principles Which of the following firms would most likely use a process cost system? Canned tuna fish manufacturer Custom home builder Accounting firm Automobile repair shopExplanation / Answer
7. Cost of Goods Manufactured = B. It is the sum of Direct Material used in production , direct labour cost incurred and manufacturing overhead incurred for the period.
8. The Sales Commision isgetting fixed revenue of $5000/- and variable revenue of $2 for each product sold. Hence for the company it is fixed cost(i.e, both fixed cost of $5000 and variable cost of $2/product)
9. Manufacturing Overhead Rate = Budgeted Manufacturing Overhead/D.L Hrs
= $240000/12000hrs
=$20/hr
Answer is B $20/hr
10. Answer is A: ABC ses fewer cost and allocation bases than more traditional cost systems
11. Process costing is widely used by manufacturer. Answer is A Canned tuna fish manufacturer
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