Randall Company manufactures chocolate bars. The following were among Randall's manufacturing costs during the current year: Randall's direct labor costs amounted to:
A) $400,000
B) $300,000
C) $175,000
D) $375,000

Question

Randall Company manufactures chocolate bars. The following were among Randall's manufacturing costs during the current year:  Randall's direct labor costs amounted to:
A) $400,000 
B) $300,000 
C) $175,000 
D) $375,000

Quizplus · Accepted Answer

Direct labor costs include labor costs that can be easily and conveniently traced to products, such as the $300,000 of wages paid to machine operators. The wages of $75,000 paid to selling and administrative personnel would be classified as period costs.

Randall Company Manufactures Chocolate Bars