When determining the cost of a manufactured product, a factory janitor's wages would be classified as
A) a direct cost.
B) an indirect cost.
C) a period cost.
D) a conversion cost.

Question

Quizplus · Accepted Answer

A factory janitor's wages would be considered an indirect cost, as they are not directly tied to the production of a specific product. Indirect costs are often classified as overhead expenses and are essential for maintaining operations but cannot be easily traced to a single product or process. Direct costs, on the other hand, can be directly linked to a specific product or process. Period costs are expenses that are not tied to production at all, such as administrative expenses. Conversion costs refer specifically to the direct costs associated with transforming raw materials into finished goods, such as labor and overhead costs.

When Determining the Cost of a Manufactured Product, a Factory