Multiple Choice
Which of the following inventory systems provides real-time updates to the Cost of Goods Sold (COGS) account with each sale?
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
Multiple Choice
Which of the following is NOT considered part of manufacturing overhead when producing a computer?
A
Wages paid to assembly line workers
B
Factory utilities expense
C
Depreciation on factory equipment
D
Factory supervisor's salary
Verified step by step guidance1
Step 1: Understand the concept of manufacturing overhead. Manufacturing overhead includes all indirect costs associated with the production process, such as factory utilities, depreciation on factory equipment, and salaries of factory supervisors. These costs are not directly traceable to a specific product.
Step 2: Identify the direct costs in the production process. Direct costs are those that can be directly traced to the production of a specific product, such as wages paid to assembly line workers or raw materials used in production.
Step 3: Compare each option provided in the question to the definition of manufacturing overhead. Determine whether each cost is an indirect cost (part of manufacturing overhead) or a direct cost (not part of manufacturing overhead).
Step 4: Recognize that wages paid to assembly line workers are a direct cost because they are directly traceable to the production of the computer. This means it is NOT considered part of manufacturing overhead.
Step 5: Conclude that the correct answer is 'Wages paid to assembly line workers,' as it does not fall under the category of manufacturing overhead.
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