Which of the Following Is an Example of an Inventoriable

question 251

Multiple Choice

Which of the following is an example of an inventoriable cost when manufacturing products?

• A)Depreciation on office equipment
• B)Depreciation on store building
• C)Sales salaries expenses
• D)Depreciation on factory equipment

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the production cost.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries of non-direct labor.

Indirect Materials

Materials used in the production process, but cannot be directly associated with a specific product.

Finished Product

A good that has completed the manufacturing process and is ready for sale to customers.