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:

Accounting Break-even

The point at which a company's total revenues equal its total expenses, resulting in neither profit nor loss, from an accounting perspective.

Production Process

The sequence of operations that transforms raw materials or inputs into finished goods or services.

Contribution Margin

The difference between a product's price and the variable costs associated with its production, indicating how much contributes to covering fixed costs and generating profit.

Cash Break-even

The point at which a business generates just enough revenue to cover its operating cash expenses, without generating profit.