Costing - Study Mode
[#216] Balance sheet, in which all costs of product that must be considered as its assets, is said to be
Correct Answer
(C) Inventoriable costs
Explanation
Solution: Balance sheet, in which all costs of product that must be considered as its assets, is said to be Inventoriable costs. Inventoriable costs, also known as product costs, refer to the direct costs associated with the manufacturing of products for revenue generation.
[#217] Direct material cost is $75000 and direct manufacturing labour is $20000, then prime cost would be
Correct Answer
(C) $95,000
Explanation
Solution: Prime cost = Direct material cost + Direct manufacturing labour = $75000 + $20000 = $95,000
[#218] Period cost, which consists income statement of manufacturing companies belongs to
Correct Answer
(C) non-manufacturing costs
Explanation
Solution: Period cost, which consists income statement of manufacturing companies belongs to non-manufacturing costs. Non-manufacturing costs refer to those incurred outside the factory or production department. These are costs are not needed in transforming materials into finished goods.
[#219] The stores keeper should initiate a purchase requisition when stock reaches ________.
Correct Answer
(D) Re-order level
Explanation
Solution: The stores keeper should initiate a purchase requisition when stock reaches Re-order level. Reorder level (or reorder point) is the inventory level at which a company would place a new order or start a new manufacturing run.
[#220] Direct cost incurred can be identified with ________.
Correct Answer
(B) each unit of output
Explanation
Solution: Direct cost incurred can be identified with each unit of output. Direct costs (such as for labor, material, fuel or power) vary with the rate of output but are uniform for each unit of production, and are usually under the control and responsibility of the department manager.