In a manufacturing company, the cost of direct labour is treated as an expense when
A)products are sold.
B)products are transferred into work in process inventory.
C)wages are paid to the employees.
D)at month end with accruals for wages.

Question

Quizplus · Accepted Answer

Direct labour cost is considered a variable cost and is included in the cost of goods sold (COGS) when the products are sold. It is not considered an expense until the product is sold and the revenue is recognized.

In a Manufacturing Company, the Cost of Direct Labour Is