Meridian International College

Fundamentals of Accounting 3
Graded Activity 2a - [Accounting for Manufacturing Business]
1st Semester, S.Y. 2023-2024

Name and Course:

General Instructions: Write all your answers beside each number. For multiple choice questions, write the capital letter
of the best answer. For straight problem-solving, write the letter or the best answer(s) with corresponding
solutions/computations to support your answers.

Identify the following:

TOTAL MANUFACTURING COST 1. A statement that shows the costs incurred in manufacturing a product.

GROSS PROFIT 2. Net Sales less Cost of Goods Sold

WORK IN PROGRESS 3. Inventory of work still in the process of production.

DIRECT MATERIALS 4. Materials that form an integral part of the product.

PRIME COST 5. The sum of the three manufacturing elements.

SELLING EXPENSE 6. Expenses necessary to promote and sell a product.

FACTORY OVERHEAD 7. Cost element that includes expenses like factory supervision, indirect
materials, heat, light and power.

CONVERSION COST 8. Term used when direct materials and direct labor are combined.

Choices:
Cost of Goods Sold Gross Profit Cost of Goods Manufactured Direct Labor
Direct Materials Prime Cost Conversion Cost Total Manufacturing Cost
Period Cost Factory Overhead Work In Process Finished Goods
Selling Expense Net Income Service Business Indirect Materials

From the following list of typical costs incurred by a manufacturer, identify the direct materials (DM), direct labor
(DL), manufacturing overhead (MOH), selling expenses (SE), and administrative expenses (AE).

SE 9. Gasoline oil for sales persons’ automobile.

AE 10. Telephone charges.
DM 11. Laces for the dress.
DM 12. Thread for sewing.
DL 13. Seamstress salary.
AE 14. Business forms used in the office.
MOH 15. Depreciation of sewing machine.
AE 16. Office furniture repair.

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