Which of the Following Will Be Included in Manufacturing Overhead

question 115

Multiple Choice

Which of the following will be included in manufacturing overhead costs?

• A)indirect labor and indirect materials
• B)salaries of salesmen
• C)direct materials and direct labor
• D)delivery costs to ship goods to customers

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Definitions:

Average Total Cost

The total cost of production (fixed and variable costs) divided by the total output or quantity produced.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance payments.

Marginal Costs

Marginal costs are the change in total costs that arise when the quantity produced is incremented by one unit, essentially the cost of producing one more unit of a good.

Average Variable Costs

Costs that change with the level of output, averaged over the total number of units produced.