Use the information below to answer the following question(s).Toronto Industries Inc.had the following activities during the year:

-For a manufacturing company, direct material costs may 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.
E)period costs.

Question

Use the information below to answer the following question(s).Toronto Industries Inc.had the following activities during the year:
 
-For a manufacturing company, direct material costs may 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. 
E)period costs.

Quizplus · Accepted Answer

Direct material costs are included in direct materials inventory, work-in-process inventory, and finished goods inventory accounts for a manufacturing company. This is because these costs are directly related to the production process and the final product. Direct material costs cannot be categorized as period costs as they are not related to the general administration or selling processes of the company.

Use the Information Below to Answer the Following Question(s)