Manufacturing overhead includes which of the following costs?
A)Fixed costs only.
B)Variable costs only.
C)Conversion costs and direct labor.
D)Variable overhead and fixed overhead.
E)Common costs and special costs.

Question

Quizplus · Accepted Answer

Manufacturing overhead includes both variable overhead (costs that vary with the level of production, such as indirect materials and utilities) and fixed overhead (costs that do not vary with the level of production, such as rent and property taxes). Therefore, choice D is the best answer. Choices A, B, and E are incorrect, as they do not encompass the full range of costs included in manufacturing overhead. Choice C is partially correct, as conversion costs (which include both direct labor and manufacturing overhead) are indeed included in manufacturing overhead, but direct labor alone is not considered part of manufacturing overhead.

Manufacturing Overhead Includes Which of the Following Costs