Which of the Following Equations Is Correct

question 61

Multiple Choice

Which of the following equations is correct?

• A)Total Manufacturing Costs = Direct Materials + Direct Labor + Selling Costs
• B)Total Manufacturing Costs = Direct Materials + Direct Labor + Overhead
• C)Total Manufacturing Costs = Direct Labor + Overhead + Selling Costs + Administrative Costs
• D)Total Manufacturing Costs = Product Costs + Period Costs

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Definitions:

Variable Manufacturing Overhead

Costs that fluctuate with production volume, such as raw materials and direct labor.

Direct Labour Hours

The overall work hours of staff directly engaged in creating products.

Variable Manufacturing Overhead

The portion of variable overhead that is directly associated with the manufacturing process, such as indirect materials or supplies.

Direct Material

Raw materials that are directly traceable and allocable to a finished product.