Factory Overhead Is an Example of a Product Cost

question 39

True/False

Factory overhead is an example of a product cost.

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Definitions:

Inventory Costing

The method of assigning costs to inventory and goods sold, which affects the gross profit and cost of goods sold reported.

First-In, First-Out

An inventory valuation method where the oldest inventory items are recorded as sold first, leaving the most recent purchases in inventory.

Direct Materials

Raw materials that can be directly traced to the production of goods.

Conversion Costs

Costs incurred in the process of converting raw materials into finished products, typically including direct labor and manufacturing overhead.