Lesson 7

Question 1

This formula sums up all the direct and indirect costs associated with the production process.

Answer 1

Total Manufacturing Cost

Question 2

This formula calculates the cost of materials directly used in the production process.

Answer 2

Direct Materials Cost

Question 3

This formula calculates the cost of labor directly involved in the production process.

Answer 3

Direct Labor Cost

Question 4

This formula includes all indirect costs that are necessary for production but not directly attributable to a specific product.

Answer 4

Manufacturing Overhead Cost

Question 5

This formula calculates the cost per unit of product, which is useful for pricing and profitability analysis.

Answer 5

. Unit Cost

Question 6

This formula calculates the total cost of goods that were completed during the period.

Answer 6

Cost of Goods Manufactured (COGM)

Question 7

This formula calculates the cost of goods that were sold during the period.

Answer 7

Cost of Goods Sold (COGS)