For a manufacturing company, direct labor costs would be included in ________.
A) only the direct materials inventory to reflect the cost of labor that has worked using those materials
B) only in the merchandise inventory to reflect the value added in the production process
C) only in both work-in-process inventory and finished goods inventory
D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts

Question

Quizplus · Accepted Answer

Direct labor costs are included in both work-in-process inventory and finished goods inventory because they are part of the manufacturing process, adding value to the product as it moves through production stages until it is completed.

For a Manufacturing Company, Direct Labor Costs Would Be Included