Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN: 9781285595047
Author: Weil
Publisher: Cengage
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Which can be considered a product cost in a manufacturing company? - corporate tax
-sales commissions
- property rate
-equipment depreciation
Describe how the income statement of a manufacturing company differs from the incomestatement of a merchandising company
Manufacturing firms must calculate their cost of goods sold based on how much they manufacture and how much it costs them to manufacture those goods. This requires manufacturing firms to prepare an additional statement before they can prepare their income statement. This additional statement is the Cost of Goods Manufactured statement.
Once the cost of goods manufactured is calculated, the cost is then incorporated into the manufacturing firm’s income statement to calculate its cost of goods sold.
One thing manufacturing firms must consider in their cost of goods manufactured is that, at any given time, they have products at varying levels of production: some are finished and others are still process.
The cost of goods manufactured statement measures the cost of the goods actually finished during the period, whether or not they were started during that period.
True / False
Even though the income statements for the merchandising firm and the manufacturing firm appear very similar at…
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- Explain how the income statement of a manufacturing company differs from the income statement of a merchandising company.arrow_forwardCOMPUTE THE COST OF GOODS SOLD HOW TO ARRIVE AT THE NET INCOME IF A CORPORATION IS A MANUFACTURING CONCERN?arrow_forwardWhich of the following is NOT an objective of determining product costs for manufacturing firms? A) To determine selling prices B) to reduce operating leverage C) to make decisions D) to do financial reportingarrow_forward
- Which of the following costs would be considered a period rather than a product cost in a manufacturing company? Manufacturing equipment depreciation. Property taxes on corporate headquarters. Direct materials costs. Electrical costs to light the production facility.arrow_forwardPlease solve this MCQs How would property taxes paid on a factory building be classified in a manufacturing company? Variable, period cost. Fixed, product cost. Fixed, period cost. Variable, product cost.arrow_forwardwhich of the following is a product cost for a manufacturing company : a- insurance on the corporate headquarters building b- property taxes on a factory c- depreciation on a salesperson vehicle d- the salary of a sales managerarrow_forward
- Who among the following is not a cost of a product? The expense of the company's fuel. The cost of power at the manufacturing foreman's office Depreciation on the company's installed plant The price of delivering finished goods to clients.arrow_forwardWho of the agreed in advance is not a cost of the product? The cost of the factory's fuel The manufacturing foreman's office's power costs Depreciation on factory-installed equipment The price of delivering completed goods to clients.arrow_forwardWhich of the following items would not be considered a manufacturing cost? a. Cream for an ice cream maker. b. Sales commissions for a car manufacturer. c. Plant property taxes for an ice cream maker. d. Tires for an automobile manufacturer.arrow_forward
- Which of the following represents the components of the income statement for a manufacturing business? A. Sales Revenue - Cost of Goods Sold = gross profit B. Service Revenue - Operating Expenses = gross profit C. Service Revenue - Cost of Goods Manufactured = gross profit D. Sales Revenue - Cost of Goods Manufactured = gross profitarrow_forwardExplain the benefits of a residual income structure within an investment center framework. It may help to think of an example using an existing company.arrow_forwardThe high-low method and least-squares regression are used by managers to _____________________. A. decide whether to make or buy a component part B. minimize corporate tax liability C. maximize output D. estimate costsarrow_forward
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