Which of the following statements is correct in describing manufacturing overhead costs
A)Manufacturing overhead when combined with direct material cost forms conversion cost.
B)Manufacturing overhead consists of all manufacturing cost except for prime cost.
C)Manufacturing overhead is a period cost.
D)Manufacturing overhead when combined with direct labour cost forms prime cost.

Question

Quizplus · Accepted Answer

Manufacturing overhead includes all manufacturing costs except direct materials and direct labor, making it the correct description. Prime cost consists of direct materials and direct labor, not including manufacturing overhead. Conversion cost is the combination of direct labor and manufacturing overhead. Manufacturing overhead is not a period cost; it is part of the total manufacturing cost and is allocated to products.

Which of the Following Statements Is Correct in Describing Manufacturing