40 Costs that are incurred as part of the manufacturing proc

40. Costs that are incurred as part of the manufacturing process but are not clearly associated specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called: A. Administrative expenses. B. Nonmanufacturing costs. C. Sunk costs. D. Factory overhead E. Preproduction costs. 41. The three major cost components of a manufactured product are: A. Marketing, selling, and administrative costs B. Indirect labor, indirect materials, and miscellaneous factory expenses. C. Direct materials, direct labor, and factory overhead. D. Differential costs, opportunity costs, and sunk costs. E. General, selling, and administrative costs. 42. Ajax Company accumulated the following account informiation for the year Beginning raw materials inventory$6,000 2,000 Indirect materials cost. Indirect labor cost 5,000 Maintenance of faotory equipment 2,800 7,000 Direet labor cost Using the above information, total factory overhead costs would be: A. $9,800. B. $16,800. C. $15,800. D. $13,000. E. $7,800. 43. The following information is available for the year ended December 31: Beginning raw materials inventory..$2,500 Raw materials purchase4,000 Ending raw materials inventory3,000 Office supplies expense.. The amount of raw materials used in production for the year is: A. $4,100. B. $5,100. $3,500 t 4,000 D. $6,500 E. $4,000.

Solution

40.D.Factory overhead.

Factory overheads cannot be traced to specific units or batches, they include all manufacturing costs other than direct materials

Administrative costs, non manufacturing costs, preproduction costs are not related to manufacturing costs.

41.C.Direct materials, direct labour and factory overhead.

three major cost components of manufactured product are direct materials, direct labour, factory overhead.

Other options provided are not cost components of manufactured product:

42.A.$9,800.

43.C.$3,500.

indirect material	$2,000
indiract labour	$5,000
maintenance of factory equipment	$2,800
Total factory overhead	$9,800