Question

Which of the following are inventory accounts for a manufacturer?

a.   raw materials, work in process, and finished goods

b.   direct labor, work in process, and finished goods

c.   manufacturing overhead, raw materials, and direct labor

d.   work in process, direct labor, and manufacturing overhead

49.       In a process cost system, equivalent units of production are the

a.   work done on physical units expressed in fully completed units.

b.   units that are transferred to the next processing department.

c.   units completed and transferred to finished goods.

d.   units that are incomplete at the end of a period.

50.       An appropriate cost driver for ordering and receiving materials cost is

a.   direct labor hours.

b.   machine hours.

c.   number of parts.

d.   number of purchase orders.

Answer 1

48. a.   raw materials, work in process, and finished goods

49. a.   work done on physical units expressed in fully completed units.

50. d.   number of purchase orders.

48. The Raw material, Work-in-Progress and Finished goods are the common type of Inventory. Raw material means the input which are purchased to manufacture the output, Work-in-Progress are semi Finished output and the Finished goods are the completed output. Direct Labor, Manufacturing overhead etc are Direct costs of Manufacturing and not a type of Inventory

49. Equivalent units of production is used to convert semi Finished units to its equivalent units of Finished goods by Multiplying the number of Semi finished units with Percentage of completion

50. the appropriate cost driver to allocate the cost of ordering and receiving materials is the number of Purchase orders placed. The more they order, they have to incur more expense. so the number of orders are the suitable cost driver