Manufacturing Account Includes Factory Production Costs

Steps:

• Identify the manufacturing account's purpose: it records costs directly tied to producing goods in the factory, including direct materials, labor, and factory overheads.
• Review each option to classify it as factory-related or not.
• Exclude costs from purchasing, selling, or administration, as those belong to trading, profit and loss, or other accounts.
• Select the option that fits factory overhead, a key component of manufacturing costs.

Why C is correct:

• Repairs of factory machinery are indirect factory overheads, included in the manufacturing account per cost accounting principles to calculate total production cost.

Why the others are wrong:

• A: Carriage on finished goods purchases is a trading account expense, not production-related.
• B: Depreciation of delivery vehicles is a distribution/selling cost, recorded in the profit and loss account.
• D: Salaries of office supervisors are administrative expenses, not factory production costs.

Final answer: C