Any costs that a company incurs to acquire raw materials and convert them to finished goods ready for sale are referred to as

Question

Quizplus · Accepted Answer

The costs involved in acquiring raw materials and converting them into finished goods are all part of the manufacturing process. Therefore, these costs are referred to as manufacturing costs. Choice A (direct costs) is incorrect because not all direct costs are manufacturing costs. Choice B (period costs) is incorrect because period costs are not related to the manufacturing process. Choice D (none of these answer choices are correct) is incorrect because option C is the correct answer.

Any Costs That a Company Incurs to Acquire Raw Materials