0
Still curious? Ask our experts.
Chat with our AI personalities
Ezra
Jordan
LaoAdd your answer:
Earn +20 pts
Is the cost of direct materials classified as a conversion cost?
No, Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
The sum of the explicit and implicit costs incurred in the production process is called?
Fixed
The ratio of the sum of cash receivables and marketable securities to current liabilities is called?
Is Current Ratio
Difference between trading account manufacturing account?
A Trading Account is a Final and financial statement drawn by a firm at the end of their accounting period showing the relationship that existed between their Sales volume and Purchases and the Gross profit or loss arrived. When Net Sales exceeds the Cost of Sales then there is Gross Profit. However, if the Cost of Sales exceeds the Net Sale(Sales less Return Inwards) then there is Gross loss. A Manufacturing Account is part of the Final accounts drawn by a manufacturing entity before drawing the Trading Account. Since the firm is engaged in the manufacturing or converting of raw materials to finished goods,they express the monetary value of Prime Cost(Direct Materials + Direct Labour + Direct Expense) and Overheads( Sum of all Indirect cost) to determine the cost of Production.
How do you compute the cost of products transferred from production to finished goods?
One would need to add together the following costs; materials, labouring and overheads. The sum of these would then be subtracted from the start balance. The answer would then indicate the total cost of the goods.
