Which of the following statements is correct in describing manufacturing overhead?
A) Manufacturing overhead when combined with direct materials cost forms conversion cost.
B) Manufacturing overhead consists of all manufacturing cost except for prime cost.
C) Manufacturing overhead is a period cost.
D) Manufacturing overhead when combined with direct labor cost forms prime cost.

Question

Quizplus · Accepted Answer

Manufacturing overhead includes all manufacturing costs except direct materials and direct labor, making it different from prime cost (which is the sum of direct materials and direct labor) and conversion cost (which is the sum of direct labor and manufacturing overhead). It is not a period cost; it is part of the total manufacturing cost.

Which of the Following Statements Is Correct in Describing Manufacturing