Question

Product costs are made up of direct material, direct labor and manufacturing overhead. Manufacturing overhead is best described as:

A. All manufacturing costs other than direct materials and direct labor.
B. All period costs associated with manufacturing operations.
C. Indirect materials and indirect labor.
D. All operating expenses other than selling expenses and general and administrative expenses.

Answer 1

Manufacturing overhead includes all the costs associated with the production process that are not direct materials or direct labor, such as supervisors' salaries or equipment depreciation.

Step-by-step explanation:

Manufacturing overhead is best described as A. All manufacturing costs other than direct materials and direct labor. This category includes all the costs associated with the production process that cannot be directly traced to a specific unit of product.

Examples of such costs are the salaries of production supervisors, depreciation of equipment used in the production process, and utility costs for the manufacturing facilities. These costs are essential to consider when determining total product costs alongside variable costs like direct labor and materials, as well as fixed costs such as rent on a factory.