Which One of These Is Handled Differently in Calculating Cash

question 63

Multiple Choice

Which one of these is handled differently in calculating cash flows for accounting versus financial purposes?

• A)Change in net working capital
• B)Depreciation expense
• C)Interest expense
• D)Deferred taxes
• E)Dividends paid

Comprehend the impact of applied and actual overhead in cost accounting.

Understand the difference between product costs and period costs.

Identify the components of product costs: direct materials, direct labor, and factory overhead.

Classify costs properly between product costs and period costs.

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Definitions:

Fixed Manufacturing Overhead

Costs associated with production that do not vary with the level of output, such as depreciation of machinery and the salary of the factory manager.

Job Cost

The total cost of labor, materials, and overhead allocated to a specific job or project.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, calculated before the accounting period begins based on estimated costs and activity levels.

Direct Labor-hours

Refers to the total hours worked by employees who are directly involved in the production process, directly affecting the manufacturing of goods.