Self-test The following questions are designed to test your understanding of the contents of this chapter. Make sure that you are able to answer all the questions clearly.

Although full answers are not provided, you will find that the questions can be answered by reference to the contents of this chapter.

(a) Explain the difference between direct factory costs and factory overheads.

(b) Prepare a list of the direct costs that exist in a manufacturing business.

(c) What is the purpose of a manufacturing account?

(d) Why are factory costs adjusted for work in progress?