Question

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

	a.	True
	b.	False

Indirect labor would be included in factory overhead.

	a.	True
	b.	False

Depreciation expense on factory equipment is part of factory overhead cost.

	a.	True
	b.	False

Direct labor cost is an example of a period cost.

	a.	True
	b.	False

Custom-made goods would be accounted for using a process costing system.

	a.	True
	b.	False

In a process costing system, a separate work in process inventory account is maintained for each customer’s job.

	a.	True
	b.	False

Answer 1

All expenses incurred inside the factory and for the benefit of manufacturing process as such include in factory overhead

Some examples of factory overhead includes

Wages paid to indirect labour such as watch and Ward staff, repairs gangs, foremen,etc

Factory rent and utilities

Depreciation on equipment's in factory

Insurance of factory and equipment's etc

Generally factory overhead cost are indirect cost incurred not including cost of direct material and labor

First Question

False, . Because material directly entered into manufacturing process are material cost directly charge to production units

Second Question

True, . From the above statement and example given indirect labour cost form part of factory overhead

Third Question

True, . From the above statement and example given depreciation on factory equipment treat as factory overhead

Fourth Question

The key difference between period cost and pridproduc cost is that product cost are incurred only when product are acquired or produced period cost associated with passage of time

Example of product cost direct material and direct labour and allocated factory overhead

Example of period cost are general and administrative cost, such as rent, office depreciation, office supplies and utilities

False, because direct labour cost are product cost