A cost accountant is reviewing the components of a Manufacturing Account for a furniture manufacturing firm. Match each specific production cost item or adjustment on the left with its appropriate treatment in the Cost of Production schedule on the right.
- Royalty paid per unit of item producedClassified as a direct expense and included in the computation of Prime Cost
- Factory supervisor's salary and plant depreciationClassified as indirect manufacturing costs and included under Factory Overheads
- Net decrease in Work-in-Progress during the financial periodAdded to Prime Cost and Factory Overheads to increase the final Cost of Production
- Carriage inwards on raw materials purchasedAdded to direct materials cost to determine the cost of raw materials consumed
Cevap
Royalty paid per unit of item produced matches with direct expense in Prime Cost; Factory supervisor's salary and plant depreciation matches with indirect manufacturing costs under Factory Overheads; Net decrease in Work-in-Progress matches with being added to Prime Cost and Factory Overheads; Carriage inwards on raw materials matches with being added to direct materials cost to find cost of raw materials consumed.
Each item is correctly matched according to standard cost accounting rules for manufacturing accounts: Carriage inwards adds to raw materials cost, royalties form part of direct expenses within Prime Cost, supervisory salaries and plant depreciation are factory overheads, and a net decrease in WIP increases the overall cost of production.
Adım Adım Çözüm
Anahtar Kavram
Preparation of Manufacturing Account and Cost of Production
Tahmini Süre:1m 30s