Multiple Choice
If 9 pints of ice cream are purchased for \$54 and all are sold during the period, what is the cost of goods sold (COGS) under both the perpetual and periodic inventory systems?
116
views
4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
Multiple Choice
Which of the following is an element of manufacturing overhead?
A
Direct labor wages
B
Sales commissions
C
Factory utilities expense
D
Direct materials used
Verified step by step guidance1
Understand the concept of manufacturing overhead: Manufacturing overhead includes all indirect costs associated with the production process that cannot be directly traced to specific units of product. Examples include factory utilities, depreciation on manufacturing equipment, and factory maintenance.
Eliminate direct costs: Direct labor wages and direct materials used are not part of manufacturing overhead because they can be directly traced to the production of specific products.
Eliminate non-manufacturing costs: Sales commissions are not part of manufacturing overhead because they are selling expenses, not related to the production process.
Identify the correct element: Factory utilities expense is an indirect cost incurred in the production process and is therefore classified as manufacturing overhead.
Conclude that factory utilities expense is the correct answer because it meets the criteria of being an indirect cost related to manufacturing.
Related Videos
Related Practice
