What term is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost,direct labor cost,and all factory overhead cost?
A) Standard costing
B) Variable costing
C) Absorption costing
D) Marginal costing

Question

Quizplus · Accepted Answer

Absorption costing is a widely used concept that involves allocating all manufacturing costs, including direct materials cost, direct labor cost, and factory overhead cost, to the manufactured products. This approach is also known as full costing as it considers all expenses related to the production process. So, option C is the correct choice. Standard costing is a technique that involves setting predetermined standards for each element of manufacturing costs to determine the total cost. Variable costing only considers variable costs and does not allocate fixed costs to products. Marginal costing is another name for variable costing.

What Term Is Commonly Used to Describe the Concept Whereby