41.The Work in Process Inventory account is found only in the ledgers of merchandising companies.
42.Raw materials purchased plus beginning raw materials inventory equals the ending balance of raw materials inventory.
43.Four factors come together in production activity: beginning work in process inventory, raw materials, direct labor, and factory overhead.
44.Newly completed units are combined with beginning finished goods inventory to make up total ending work in process inventory.
45.The series of activities that add value to a company's products or services is called a value chain.
46.The raw materials inventory turnover is raw materials purchased divided by the average raw materials inventory.
47.A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products.
48.Indirect materials are accounted for as factory overhead because they are not clearly identified with specific product units.
49.Indirect labor refers to the cost of the workers whose efforts are directly related to specific units of product.
50.Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.
51.Factory overhead includes selling and administrative expenses because they are indirect costs of a product.
52.Prime costs consist of direct labor and factory overhead.
53.The schedule of cost of goods manufactured is also known as a manufacturing statement.
54.The schedule of cost of goods manufactured must be prepared monthly as it is a required general-purpose financial statement.
