Question

Which of the following statements concerning manufacturing costs is incorrect? Multiple Choice All salaries incurred by the sales department are expensed as incurred. Direct labor costs are recorded initially in an inventory account. The cost of direct materials can be readily traced to products. Depreciation on manufacturing equipment is a period cost

Answer 1

Depreciation on manufacturing equipment is a period cost

Step-by-step explanation:

Manufacturing cost is the cost used to manufacture a product, both direct and indirect cost incurred in manufacturing process are included. It is the total value of material cost, labor cost and overhead cost.

Depreciation on the manufacturing equipment is also a Manufacturing overhead cost, because these equipment are used for the production purpose, so this is charged to manufacturing cost.

Answer 2

Direct labor costs are recorded initially in an inventory account

Step-by-step explanation:

All the other statements are correct except the statement which states that Direct labor costs are recorded initially in an inventory account.

Direct Labor costs must be accumulated in work in process inventory as they are incurred, there is no initial recording in the inventory account.