All Costs Other Than Direct Materials and Direct Manufacturing Labor

question 113

True/False

All costs other than direct materials and direct manufacturing labor are classified as indirect costs.

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Definitions:

Total Manufacturing Costs

Total manufacturing costs encompass the sum of direct labor cost, direct materials cost, and manufacturing overhead costs incurred in the production of goods.

Direct Materials

Raw materials that are directly traceable to the production of specific goods.

Manufacturing Overhead

All manufacturing costs except direct materials and direct labor, including expenses such as rent, utilities, and depreciation on manufacturing facilities.

Balanced Scorecard

A strategic planning and management system used to align business activities to the vision and strategy of the organization, focusing on financial and non-financial measures.