The total cost of a manufactured item includes direct materials, direct labor and manufacturing overhead.

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The total cost of a manufactured item includes direct materials, direct labor and manufacturing overhead. This is a fundamental principle of cost accounting. Direct materials refer to the raw materials used in the manufacturing process, direct labor refers to the wages and benefits paid to workers who are directly involved in the production of the item, and manufacturing overhead includes all other indirect costs associated with the manufacturing process, such as utilities, rent, equipment, and supplies. Together, these three elements make up the total cost of the manufactured item.

The Total Cost of a Manufactured Item Includes Direct Materials