Which of the following is true?
A) Factory overhead consists of manufacturing costs other than direct materials and direct labour.
B) Purchases discounts increase sales revenue to arrive at net sales.
C) Net realizable value is the expected sales price plus selling costs.
D) FIFO Reserve is a contra sales account for the excess of FIFO over weighted-average inventory.

Question

Quizplus · Accepted Answer

Factory overhead includes indirect materials, indirect labor, and other indirect costs associated with manufacturing. It does not include direct materials and direct labor costs.

Answer: C
 Net realizable value is the estimated selling price of an item minus the costs of completing and selling it.

Answer: D
 The FIFO Reserve is not a contra sales account. It is a component of inventory that represents the difference between the cost of inventory calculated using FIFO method and the cost calculated using weighted-average method.

Which of the Following Is True