Manufacturing Account: Terminologies Used - SS2 Accounting Past Questions and Answers - page 1
What is the term used to describe the cost of the materials that are used in the production process?
Raw Materials
Work in Progress
Finished Goods
Manufacturing Overhead
What is the term used to describe the cost of the workers who are directly involved in the production process?
Direct Labor
Manufacturing Overhead
Raw Materials
Cost of Goods Sold
What is the term used to describe the indirect costs associated with production, such as rent, utilities, and equipment?
Manufacturing Overhead
Direct Labor
Raw Materials
Finished Goods
What is the term used to describe the value of goods that have been completed and are ready to be sold?
Finished Goods
Raw Materials
Work in Progress
Manufacturing Overhead
What is the term used to describe the total cost of the goods that have been sold during the accounting period?
Cost of Goods Sold
Gross Profit
Net Profit
Closing Inventory
How does the manufacturing account help in analyzing the profitability of a company's manufacturing operations?
The manufacturing account provides a detailed breakdown of the costs associated with production, including raw materials, direct labour, and manufacturing overhead. This information can be used to calculate the cost of goods sold and gross profit, which can then be analyzed to determine the profitability of the company's manufacturing operations.
What is the purpose of calculating the closing inventory in a manufacturing account?
The closing inventory represents the value of the inventory at the end of the accounting period, and it is used to calculate the cost of goods sold for that period. By subtracting the value of the closing inventory from the total cost of goods produced, the cost of goods sold can be determined.