Orion's management recently committed to incurring direct labour and all manufacturing overhead charges regardless of the number of units produced. Under throughput costing, the company's cost of goods sold would include charges for:
A)selling and administrative costs.
B)direct materials.
C)direct labour and manufacturing overhead.
D)direct materials, direct labour, and manufacturing overhead.
E)direct materials, direct labour, manufacturing overhead, and selling and administrative costs.

Question

Quizplus · Accepted Answer

Under throughput costing, only direct materials are included in the cost of goods sold, while direct labor and manufacturing overhead are treated as period costs.

Orion's Management Recently Committed to Incurring Direct Labour and All