Question

The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that are incurred at the company. Required: For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost.The cost of a hard drive installed in a computer. a. Direct labor cost b. Direct materials cost c. Manufacturing overhead cost d. Selling cost e. Administrative cost

Answer 1

Answer: b. Direct materials cost

Step-by-step explanation:

Direct materials are integral to the production of a good because they form part of the good being produced.

This is a computer company which assembles computers. Computers need a hard drive in order to function. The hard drive being installed in a computer will therefore count as a direct material because it will form part of the computer assembled.