Question

Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?

• A. Direct materials, direct labour, and factory overhead
• B. Direct materials and direct labour only
• C. Direct materials, direct labour, factory overhead and administrative overhead
• D. Direct labour and factory overhead

Answer 1

The correct option is C Direct materials, direct labour, factory overhead and administrative overhead

This can be represented as:

Direct Material xxxx

Direct Labour xxxx

Direct Expenses xxxx

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PRIME COST xxxx

Factory Overheads xxxx

Administrative O/hs xxxx

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Manufacturing Cost xxxx

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