Indirect Materials Costs and Purchasing Procedures Quiz

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What category do completed items of production not yet sold fall under in a manufacturing company?

Raw materials

Indirect materials

Finished goods (correct)

Work in progress

Which type of materials are part-finished productions classified as in a manufacturing company?

Raw materials

Indirect materials

Work in progress (correct)

Finished goods

What is the main focus of controlling materials costs in manufacturing businesses?

Reducing indirect materials costs (correct)

Minimizing direct materials costs

Maximizing finished goods inventory

Increasing work in progress levels

Which accounting term is used to describe materials that have not yet been incorporated into the finished product in a manufacturing process?

Direct materials Signup and view all the answers

What are finished goods?

Products that are ready to be sold Signup and view all the answers

Which of the following is an example of indirect materials costs?

Cleaning fluids and substances Signup and view all the answers

What is the purpose of purchasing procedures in a business?

To ensure materials are bought efficiently and responsibly Signup and view all the answers

Which department in a large business is typically responsible for material procurement?

Specialist buying department Signup and view all the answers

What step is NOT part of the buying process mentioned in the text?

Manufacturing the item Signup and view all the answers

What is the first stage in the purchasing process as described in the text?

Completing a purchase requisition form Signup and view all the answers

Who is usually required to authorize a purchase requisition form?

A senior person in the department requiring the goods Signup and view all the answers

What is an essential reason for maintaining records in a business?

To facilitate communication between departments Signup and view all the answers

In a manufacturing organization, what typically follows the completion of a purchase requisition form?

Sending an order form to the supplier Signup and view all the answers

Which department is responsible for carrying out the necessary transaction after a purchase requisition form is completed?

Purchasing department Signup and view all the answers

Why might a purchase requisition form need authorization from a senior person in the finance department?

If substantial expense is involved Signup and view all the answers

Indirect Materials Costs and Purchasing Procedures Quiz

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