Which of the following is a conversion cost?
Factory overhead
Purchases
Material cost
Wages
Correct answer is A
Conversion costs are costs required to convert raw materials into finished goods
Formula for conversion cost= direct labor+ factory overheads
#511.25 debit
#500.00 credit
#349.75 debit
#340.00 credit
Correct answer is C
The amount withdrawn by the partners for their personal use out of the firm is known as drawings. Interest are charged on this drawings
Cost of rent as an expense can be apportioned to all department on the basis of:
No of employees
Stock value
Space occupied
Wages
Correct answer is C
Indirect expenses are allocated among departments in order to ascertain the profits or loss made by each department.
₦700
₦1050
₦1750
₦3500
Correct answer is C
Jewelry 3/10 x 3500 = 1050
Hairdressing 2/10 x 3500 = 700
Clothing 5/10 x 3500 = 1750
Why should a new partner contribute towards goodwill on his admission?
It is a norm
To ensure new partner also have a stake in the business
The firm into which he is entering already has some goodwill in the market
To purchase the business
Correct answer is C
Goodwill is being paid by a new partner because the partnership he is entering into already has goodwill in the market as well as to pay for the portion sacrificed by existing partners in form to their profit to admit the new partner.
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