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

Question

Quizplus · Accepted Answer

Factory overhead includes costs such as indirect materials, indirect labor, and other manufacturing expenses that are not directly associated with the production of goods.

Answer: B
 Net realizable value is the estimated selling price of inventory minus any costs that are necessary to complete the sale, such as selling expenses or disposal costs.

Answer: C
 FIFO Reserve is a contra inventory account that is created when a company uses the FIFO (first-in, first-out) method to value its inventory. This account represents the difference between the inventory cost calculated using the FIFO method and the cost calculated using the weighted-average method.

Answer: None of the above
 Purchases discounts do not affect sales revenue, as they are a reduction in the cost of goods sold. They represent a reduction in the amount paid for inventory, and therefore, result in a lower cost of goods sold and higher gross margin.

Which of the Following Is True