Question

Riverland Shoes and Boots Inc. manufactures three styles of steel-toed work boots. Which of the following accounts is NOT part of the indirect MOH costs that will be assigned to each of the three styles of work boots being produced?

Answer 1

Indirect manufacturing overhead costs are those that cannot be directly traced to a single product, unlike direct materials or direct labor. Costs like factory rent and utilities are considered indirect MOH, while the cost of leather for the boots would not be.

Step-by-step explanation:

The question concerns the classification of manufacturing overhead (MOH) costs in the production of goods, specifically in the context of Riverland Shoes and Boots Inc. and its production of steel-toed work boots. Indirect MOH costs are expenses related to the production process that cannot be directly traced to a single product.

These typically include items such as factory rent, utilities, depreciation on equipment, and salaries of supervisors. An example of a cost that is NOT part of indirect MOH would be direct materials or direct labor since these costs can be traced specifically to each unit of product.