10. Total of all direct costs is termed asA. prime costB. works costC. cost of salesD. cost of production

Option a: This option is correct because prime cost in accounting refers to the total direct costs…

Answered: 10. Total of all direct costs is termed…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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d. Perpetual system, LIFO cost flow. e. Periodic system, weighted-average cost flow. f. Perpetual system, moving-average cost flow.
In CVP Analysis, total costs are defined as costs derived from product costs and period costs. TRUE FALSE
Atlanta Systems produces two different products, Product A, which sells for $450 per unit, and Product B, which sells for $800 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Product A Usage by Product B Cost Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 190,000 $1,800,000 $ 108 142 2,160 2,840 160,000 42 38 8 Atlanta manufactures 12,500 units of Product A and 10,200 units of Product B per month. Each unit of Product A uses $100 of direct materials and $45 of direct labor, while each unit of Product B uşes $140 of direct materials and $75 of direct labor.
Costs treated as product costs under direct costing are: A. Variable production cost only B. All variable and fixed manufacturing costs C. Prime costs only D. All variable costs
The product cost period cost opertunity cost
• The unit cost… a. is the total conversion costs divided by the number of units produced. b. is the total product costs divided by the number of units produced. c. product plus period cost d. is the total prime costs divided by the number of units produced. e. includes period costs.
Under variable costing, all fixed manufacturing costs are treated as a a. product cost included in the cost of goods manufactured. b. product cost included in the cost of ending inventory. c. period expense deducted from manufacturing margin. d. period expense deducted from contribution margin.
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What are “initial direct costs” and how are they accountedfor?
Required information The Foundational 15 [LO4-1, LO4-2, LO4-3, L04-4, LO4-5] [The following information applies to the questions displayed below.] Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method of process costing. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June): Work in Process-Mixing Department Completed and transferred to Finished June 1 balance 28,000 ? Goods Materials 120,000 79,500 97,000 Direct labor Overhead June 30 balance The June 1 work in process inventory consisted of 5,000 units with $16,000 in materials cost and $12,000 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 50% complete with respect to conversion. During June, 37,500 units were started into production. The June 30…
How is the cost per equivalent unit of production calculated?
In cost terms, direct labor cost is included inA. Manufacturing costsB. Prime costsC. Conversion costsD. B and CE. A, B and C

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10. Total of all direct costs is termed as A. prime cost B. works cost C. cost of sales D. cost of production