Manufacturing costs are:
A)always relevant.
B)always fixed.
C)the costs incurred to produce a final product.
D)split into prime costs and conversion costs.

Question

Quizplus · Accepted Answer

Manufacturing costs refer specifically to the expenses associated with creating a final product. This includes direct costs like materials and labor, as well as indirect costs like overhead and utilities. While prime costs (direct costs) and conversion costs (direct and indirect costs) are types of manufacturing costs, they do not encompass all of the costs incurred in the manufacturing process. Therefore, C is the best answer. A is incorrect because while manufacturing costs are almost always relevant, there may be situations where they are not important (such as when assessing the profitability of a product line that is being phased out). B is incorrect because manufacturing costs can include both fixed and variable expenses. D is incorrect because while prime costs and conversion costs are subsets of manufacturing costs, they do not fully capture all of the expenses associated with production.

Manufacturing Costs Are