Match each description to the appropriate term. Answers may be used more than once. Selling and administrative expense Factory overhead Indirect materials used Sales supplies used Rent expense on factory building Factory supplies used

Match each description to the appropriate term. Answers may be used more than once. Selling and administrative expense Factory overhead Indirect materials used Sales supplies used Rent expense on factory building Factory supplies used

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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Concept explainers

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.

Question

Match each description to the appropriate term. Answers may be used more than once.

Selling and administrative expense

Factory overhead

Indirect materials used

Sales supplies used

Rent expense on factory building

Factory supplies used

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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