The Three Major Cost Components of a Manufactured Product Are

question 125

Multiple Choice

The three major cost components of a manufactured product are:

• A) Marketing, selling, and administrative costs.
• B) Indirect labor, indirect materials, and miscellaneous factory expenses.
• C) Direct materials, direct labor, and factory overhead.
• D) Differential costs, opportunity costs, and sunk costs.
• E) General, selling, and administrative costs.

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Definitions:

Inventory Cycle

The series of stages that inventory goes through, from initial purchase or production to sale, including restocking and management.

Stocking Level

Refers to the quantity of inventory kept on hand by a business to meet demand without incurring stockouts or excessive surplus.

Standardized Parts

are components manufactured to a set specification that can be used interchangeably in various products, reducing costs and simplifying production.

Management Succession

A strategy within an organization for passing leadership roles, including the transition of its senior leaders and the continuity of business operations.