FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Which of the following is a TRUE statement regarding the treatment of scrap by a firm?
a. Scrap is always allocated to a specific job.
b. Scrap is separated between normal and abnormal scrap.
c. Revenue received from the sale of scrap on a job lowers the total costs for that job
. d. There are costs assigned to scrap.
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- Which of the following is an example of a variable cost? a.Insurance on the production equipment b.Direct materials c.The production supervisor's salary d.Depreciation of the factory building e.None of thesearrow_forwardf) ‘Process costing is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced.’ There are some statements about the process costing: An abnormal loss occurs when expected output exceeds actual output. The scrap value of an abnormal loss is credited to the process account. The allocated cost of an abnormal gain is credited to the process account. The inputs to a process less the normal loss is the expected output. The normal loss in a process is allocated a cost in order to reconcile the costs of inputs and outputs. The FIFO method assumes opening WIP is the first group of units to be completed. Therefore, opening WIP is charged separately to completed production and CPU is based on current period costs. Required: Please identify which of the above statements are false and explain the reasons.arrow_forward1.) WHICH ONE OF THE FOLLOWING WOULD NOT BE CLASSIFIED AS MANUFACTURING OVERHEAD? (A) INDIRECT LABOR (B) DIRECT MATERIALS (C) INSURANCE ON FACTORY BUILDING (D) INDIRECT MATERIALS 2.) THE PRODUCT COST THAT IS MOST DIFFICULT TO ASSOCIATE WITH A PRODUCT IS (A) DIRECT MATERIALS. (B) DIRECT LABOR. (C) MANUFACTURING OVERHEAD. (D) ADVERTISING.arrow_forward
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