parts consisting of all of the The schedule of cost of goods manufactured follow

Question

parts consisting of all of the The schedule of cost of goods manufactured following except: is divided into four 8. a) Direct materials. b) Computation of cost of goods sold c) Overhead d) Computation of cost of goods manufactured. e) Direct labor. 9. All of the following statements regarding manufacturing costs are true except: a) Direct material costs that increase in total with volume of production are called variable costs. b) The reporting of fixed and variable costs separately is not helpful to managers in analyzing cost behavior. c When overhead costs vary with production, they are called variable overhead. d) When overhead costs don't vary with production, they are called fixed overhead. e) Overhead can be both variable and fixed. 10. A company's prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials are $2,000,000, calculate the overhead costs: a) $2,500,000. b) $3,500,000. c) $2,000,000. d) $1,000,000. c) $3,000,000. 11. Which of the following costs would not be classified as factory overhead? a) Property taxes on maintenance machinery b) Insurance on factory building c) Wages of the factory janitor. d) Rubber for the soles of shoes produced. c) Small tools used in production.

Explanation / Answer

8 Computation of cost of goods sold is not included Option B is correct 9 The reporting of fixed and variable costs separately is not helpful to managers is not correct 10 Direct labor =4500000-2000000 = 2500000 Overhead costs = 5500000-2500000 = $3000000 11 . Rubber for the soles of shoes produced would not be classified as factory overhead

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