In activity-based costing, unit product costs computed for external financial reports include:
A)direct materials and manufacturing overhead.
B)direct labor and manufacturing overhead.
C)direct materials, direct labor, and manufacturing overhead.
D)direct materials and direct labor.

Question

Quizplus · Accepted Answer

In activity-based costing, the unit product costs computed for external financial reports include direct materials, direct labor, and manufacturing overhead. This is because activity-based costing considers all indirect costs, such as manufacturing overhead, as a part of the unit product cost. Therefore, option C is the correct choice. Options A, B, and D are incorrect because they do not include all three elements of product cost in activity-based costing.

In Activity-Based Costing, Unit Product Costs Computed for External Financial