Describe the effects of using direct and indirect material.

Q: The standards for direct materials are made up of which of the following components?

A: The pricing standard and quantity standard are the elements of direct material variances. Direct…

Q: Describe fixed manufacturing overhead under absorption costing.

A: Absorption costing: Under this method, manufacturing cost such as direct material and labor is…

Q: Define equivalent units of production.

A: Definition:   Process costing: It is a method of cost accounting, which is used where the production…

Q: Why is materials inspection a prevention costs rather than an appraisal costs?

A: Lets understand the basics. Cost incurred in order to minimize or avoid the defect at the production…

Q: Differentiate between physical units and equivalent units

A:

Q: Discuss the disadvantages of Absorption Costing for cost control and performance evaluation.

A: Absorption Costing: Absorption costing is a method for calculating the full cost or total cost of a…

Q: Define backflush costing.

A: Just-in-time (JIT) manufacturing system is an approach to manufacturing that eliminates and reduces…

Q: Discuss the characteristics and costs of useful information. What makes information useful and what…

A: Accounting information is broad in nature and should be structured to meet the information needs of…

Q: Describe at a high level the various cost categories and expenditures.

A: Expenditures refer to money spent on goods, services, or investments. It is the amount of money used…

Q: Describe the term cost of the direct materials.

A: Cost:  Cost refers to the expenses incurred by the business to earn revenue from sales, in other…

Q: Define absorption costing.

A: Absorption costing refers to managerial accounting cost method for expending each costs associated…

Q: How can the work-in-process concept be viewed?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Explain unit product cost under absorption costing.

A: Absorption costing (also known as the “Cost-Plus” approach), is a method that is centered upon the…

Q: explain the difference between target costing, skimming costing, and penetration costing

A: Pricing decisions is one of the most important and required decision for the management. Pricing…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.