For a manufacturing company, indirect manufacturing costs would be included in ________.
A) direct materials inventory only
B) merchandise inventory only
C) both work-in-process inventory and finished goods inventory
D) direct materials inventory, work-in-process inventory, and finished goods inventory accounts

Question

Quizplus · Accepted Answer

Indirect manufacturing costs are manufacturing costs that cannot be directly traced to specific units of production. They include costs like rent, utilities, and salaries for production supervisors. These costs are not a part of direct materials or direct labor costs, so they cannot be included in those inventory accounts. Instead, they are included in the work-in-process inventory and finished goods inventory accounts, because they are indirect costs of manufacturing those products.

For a Manufacturing Company, Indirect Manufacturing Costs Would Be Included