Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner include:
A) depreciation on production equipment.
B) direct material.
C) indirect labor.
D) both depreciation on production equipment and indirect labor.

Question

Quizplus · Accepted Answer

Depreciation on production equipment and indirect labor are both examples of manufacturing costs that cannot be easily traced to specific units of product in a cost-effective manner. Depreciation expenses are related to the wear and tear of equipment, and indirect labor includes expenses related to production support personnel such as supervisors, maintenance workers, and quality control personnel. Direct materials, on the other hand, can be easily traced to specific units of product as they are physically incorporated into the products during the production process.

Manufacturing Costs That Cannot Be Traced to Specific Units of Product