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 will be included in manufacturing overhead costs?

Direct materials used in production

Wages paid to assembly line workers

Sales commissions paid to sales staff

Factory utilities expense

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Verified step by step guidance

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 factory equipment, and salaries of factory supervisors.

Analyze each option provided in the problem: Direct materials used in production and wages paid to assembly line workers are direct costs, meaning they can be directly traced to the production of specific units. Sales commissions paid to sales staff are selling expenses, not manufacturing costs.

Identify the correct classification for factory utilities expense: Factory utilities expense is an indirect cost incurred during the production process. It is part of manufacturing overhead because it supports the production environment but cannot be directly traced to specific products.

Review the distinction between direct costs and indirect costs: Direct costs (e.g., direct materials and direct labor) are directly attributable to the production of goods, while indirect costs (e.g., factory utilities) are shared across the production process and fall under manufacturing overhead.

Conclude that factory utilities expense is the correct answer: Based on the definitions and classifications, factory utilities expense is included in manufacturing overhead costs.