Question

Em #1 of 13 When using the cost of production report to analyze the change in direct materials cost per equivalent unit, an investigation may reveal that direct materials costs O a. will never decrease due to the way the cost is calculated. O b. will never increase due to the way the cost is calculated. c. may increase or decrease between periods, depending on the fluctuation of the cost of the direct materials Od. will only increase if conversion costs increase as well. 10 11 12 I'm Done

Answer 1

As per HOMEWORKLIB POLICY and guideline, the first-four MCQs are answered below:

1.

Answer: c

It may increase or decrease depending on the fluctuation. That fluctuation arises if the cost price of material charges in the market or the availing of discount on material changes; such as material cost per unit in the market increases from $5 per unit to $6 per unit.

2.

Answer: c

Work-in-process (WIP) at the end of a period is the aggregate of all direct and actual cost during the period – like material cost, labor cost, etc.

It does not include estimated or remaining cost associated with that WIP.

3.

Answer: c

A predetermined overhead rate is multiplied with actual hours or units in order to get applied overhead amount.

Journal: WIP inventory is debit, factory or manufacturing overhead is credit.

Therefore, it decreases the factory, since it is credited.

4.

Answer: c

This is the ratio of (output / input) in terms of material quantity. It helps to understand the returns out of the application of funds. A higher yield is always desirable.