For a manufacturing company,direct labor costs may be included in ________.
A) direct materials inventory only
B) merchandise inventory only
C) 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 the cost of producing goods, and therefore, are part of the cost of inventory. Direct labor costs are typically included in the work-in-process inventory and finished goods inventory accounts, as they are incurred during the manufacturing process. Direct materials costs are also included in these inventory accounts, while indirect costs, such as factory overhead, are typically allocated to these accounts based on a predetermined overhead rate. Therefore, the correct answer is C, both work-in-process inventory and finished goods inventory.

For a Manufacturing Company,direct Labor Costs May Be Included in ________