Costing - Study Mode

[#451] Health care premium for workers and pension costs are included in
Correct Answer

(A) payroll fringe costs

Explanation

Solution: Health care premium for workers and pension costs are included in payroll fringe costs. A fringe benefit rate is a percentage that results from dividing the cost of an employee's fringe benefits by the wages paid to the employee for the hours actually worked.

[#452] All costs, which are assigned to manufactured products for specific calculations are classified as
Correct Answer

(B) product cost

Explanation

Solution: All costs, which are assigned to manufactured products for specific calculations are classified as product cost. Product cost refers to the costs incurred to create a product. These costs include direct labor, direct materials, consumable production supplies, and factory overhead.

[#453] If direct material cost is $5500 and prime cost is $25000, then direct manufacturing labour would be
Correct Answer

(A) $19,500

Explanation

Solution: Direct manufacturing labour = Prime cost - Direct material cost = $25000 - $5500 = $19,500

[#454] Direct manufacturing labour costs is $40000 and manufacturing overhead cost is $7000, then conversion cost would be
Correct Answer

(A) $47,000

Explanation

Solution: Conversion cost = Direct manufacturing labour costs + Manufacturing overhead cost = $40000 + $7000 = $47,000

[#455] If sales budget variance is $57000 and flexible budget amount is $97000, then static budget amount will be
Correct Answer

(A) $40,000

Explanation

Solution: Static budget = Flexible budget - Sales budget variance = $97000 - $57000 = $40,000