Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

Which of the following is included in a unit product cost?

Only direct materials and direct labor

Interest expense and income tax expense

Selling expenses and administrative expenses

Direct materials, direct labor, and manufacturing overhead

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Verified step by step guidance

Understand the concept of unit product cost: Unit product cost refers to the total cost incurred to produce a single unit of a product. It includes all costs directly associated with manufacturing the product.

Identify the components of unit product cost: These components typically include direct materials, direct labor, and manufacturing overhead. Direct materials are the raw materials used in production, direct labor refers to the wages paid to workers directly involved in manufacturing, and manufacturing overhead includes indirect costs such as factory utilities and depreciation of equipment.

Exclude non-manufacturing costs: Selling expenses, administrative expenses, interest expense, and income tax expense are not included in unit product cost because they are not directly related to the production process. These are classified as period costs and are expensed in the period incurred.

Relate the components to the production process: Direct materials and direct labor are tangible and directly traceable to the product, while manufacturing overhead represents indirect costs that support the production process but cannot be directly traced to a specific unit.

Summarize the correct answer: The unit product cost includes direct materials, direct labor, and manufacturing overhead, as these are the costs directly tied to the production of a product.