The cost of a manufactured product generally consists of which of the following costs?
A) Direct materials cost and factory overhead cost
B) Direct labor cost and factory overhead cost
C) Direct labor cost, direct materials cost, and factory overhead cost
D) Direct materials cost and direct labor cost

Question

Quizplus · Accepted Answer

The cost of a manufactured product includes direct labor cost, direct materials cost, and factory overhead cost. Direct labor cost is the wages paid to workers who directly produce the product. Direct materials cost includes the cost of all materials that are needed to produce the product. Factory overhead cost includes all expenses associated with the production process, such as rent or depreciation on production facilities, utilities, and insurance. Thus, all three costs are included in the total cost of the manufactured product.

The Cost of a Manufactured Product Generally Consists of Which