A Manufacturing Firm Produces Multiple Families of Products Requiring Various

question 112

Multiple Choice

A manufacturing firm produces multiple families of products requiring various combinations of different types of parts.Of the following,the MOST appropriate cost driver for assigning materials handling costs to the various products is:

• A)direct labour hours.
• B)number of parts used.
• C)number of suppliers involved.
• D)number of units produced.

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Definitions:

Direct Materials

Raw materials that can be directly traced to the production of goods, distinct because they are an integral part of the finished product.

Manufacturing Overhead

All indirect costs related to manufacturing beyond direct materials and direct labor, such as indirect labor, maintenance, and factory supplies.

Work in Process

Work in Process (WIP) consists of goods that are in various stages of the production process but are not yet completed, reflecting both direct materials, direct labor, and applied overhead.

Actual Costs

The incurred expenses that a company has paid for manufacturing, operating, or producing goods and services.