In a traditional manufacturing company, product costs include
A)direct materials only.
B)direct materials, direct labour, and factory overhead.
C)direct materials and direct labour only.
D)direct labour only.

Question

Quizplus · Accepted Answer

Product costs in a traditional manufacturing company include direct materials, direct labour, and factory overhead. Direct materials are the cost of the materials that go into a finished product. Direct labour is the cost of the workers who directly contribute to the production of the product. Factory overhead includes all other costs associated with producing the product, such as rent, utilities, and depreciation of equipment. Therefore, option B is the correct answer as it includes all three components of product costs.

In a Traditional Manufacturing Company, Product Costs Include