Question

Product costs are expensed only when the products or services with which they are associated are sold. What are the three general categories of product costs?

1) Direct labor, indirect labor, and materials
2) Executive salaries, building and maintenance fees, and indirect labor
3) Direct materials, executive salaries, and maintenance
4) Manufacturing overhead, direct materials, and direct labor

Answer 1

The three general categories of product costs are Manufacturing overhead, direct materials, and direct labor.

Step-by-step explanation:

The three general categories of product costs are Manufacturing overhead, direct materials, and direct labor. Manufacturing overhead includes costs such as factory rent, factory utilities, and factory maintenance. Direct materials are the raw materials that are used to produce the products, such as wood for furniture or steel for cars. Direct labor encompasses the wages and benefits paid to the workers who directly contribute to the production of the products.