What Are the Components of Total Manufacturing Costs

question 61

Multiple Choice

What are the components of total manufacturing costs?

• A)direct materials and direct labour only
• B)direct labour and manufacturing overhead only
• C)manufacturing overhead only
• D)direct materials, direct labour, and manufacturing overhead

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Definitions:

Break-even Point

The volume of sales at which total revenues equal total costs, resulting in zero profit or loss.

Variable Cost

Costs that change in proportion to the level of goods or services a business produces.

Fixed Costs

Fixed costs, including expenses like leasing fees, employee payments, and insurance, are unaffected by variations in manufacturing or sales volumes.

Manufacturing Cost Schedule

A detailed report outlining the total cost associated with producing a product, including direct labor, direct materials, and overhead costs.