Which of the following is an indirect production cost?
A)materials placed into production
B)calibrating factory equipment
C)labour placed into production
D)cost of shipping a product to the customer
E)advertising

Question

Quizplus · Accepted Answer

Calibrating factory equipment is an indirect production cost because it is not directly involved in the manufacturing process but is necessary to keep the equipment in proper working order. Materials placed into production and labor placed into production are direct production costs as they are directly involved in the manufacturing process. Cost of shipping a product to the customer and advertising are indirect costs but not specifically related to production.

Which of the Following Is an Indirect Production Cost