Which of the Following Would Not Be Classified as a Product

question 66

Multiple Choice

Which of the following would not be classified as a product cost?

• A) Direct materials.
• B) Direct labor.
• C) Indirect materials.
• D) Insurance on a manufacturing plant.
• E) Sales commissions.

---

Definitions:

Underapplied

Describes a situation where the allocated overhead costs in accounting are less than the actual overhead costs incurred.

Overapplied

A scenario in which the overhead cost assigned to manufacturing exceeds the overhead that was actually incurred.

Direct Labor-Hours

A measure of the labor directly involved in manufacturing a product, represented in hours.

Predetermined Overhead Rate

A rate calculated before a period begins, based on estimated overhead costs and activity levels, used to allocate overhead to products.