The three major cost components of a manufactured product are:
A) Marketing, selling, and administrative costs.
B) Indirect labor, indirect materials, and miscellaneous factory expenses.
C) Direct materials, direct labor, and factory overhead.
D) Differential costs, opportunity costs, and sunk costs.
E) General, selling, and administrative costs.

Question

Quizplus · Accepted Answer

Direct materials, direct labor, and factory overhead are the three major cost components of a manufactured product. Direct materials are the raw materials that go into a product, direct labor is the labor cost involved in making the product, and factory overhead represents all other costs such as rent, utilities, insurance, depreciation, and maintenance that are necessary to operate the factory.

The Three Major Cost Components of a Manufactured Product Are