Question

Which of the following statements are true?

The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead.
The three cost elements ordinarily included in product costs are direct materials, direct labor, and manufacturing overhead.
a Only statement II is true.
b Both of the statements are true.
c Only statement I is true.
d Neither of the statements are true.

Answer 1

Both statements are true. Manufacturing overhead is the sum of all manufacturing costs except for direct materials and direct labor, and the three cost elements included in product costs are direct materials, direct labor, and manufacturing overhead.

Step-by-step explanation:

Both of the statements are true. The sum of all manufacturing costs except for direct materials and direct labor is called manufacturing overhead. This includes costs such as indirect materials, indirect labor, and other production expenses. The three cost elements ordinarily included in product costs are direct materials, direct labor, and manufacturing overhead. These costs are typically incurred in the production of goods or services and are necessary to create the final product.