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

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

Which of the following costs are most likely to be controllable at the production supervisor level in relation to Cost of Goods Sold under a perpetual or periodic inventory system?

Depreciation expense on factory equipment

Property taxes on the manufacturing facility

Raw material purchase price

Direct labor costs

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Verified step by step guidance

Understand the concept of controllable costs: Controllable costs are those that a manager or supervisor can influence or change within their scope of authority. In this case, the production supervisor has control over certain costs related to the production process.

Analyze each cost item provided in the question: Depreciation expense on factory equipment and property taxes on the manufacturing facility are fixed costs and typically not controllable by the production supervisor, as these are determined by external factors or long-term decisions.

Consider the raw material purchase price: While raw material costs are variable, they are usually negotiated by procurement or purchasing departments, not the production supervisor. Therefore, this cost is not directly controllable at the production supervisor level.

Focus on direct labor costs: Direct labor costs are associated with the wages paid to workers directly involved in the production process. The production supervisor can influence these costs by managing work schedules, overtime, and productivity, making them controllable at this level.

Conclude that direct labor costs are the most likely to be controllable by the production supervisor in relation to Cost of Goods Sold under both perpetual and periodic inventory systems.