In manufacturing,all costs directly related to production,including raw materials,labour,and factory overhead are classified as which of the following?
A) cost of goods sold
B) intangible profits
C) operating expenses
D) inventory expenses

Question

Quizplus · Accepted Answer

Cost of goods sold is the direct cost that can be attributed to the production of goods. It includes the cost of raw materials, labor, and factory overhead. Therefore, option A is the correct choice as it aligns with the definition given in the question. Option B is incorrect as intangible profits are not directly related to production costs. Option C is also incorrect as operating expenses include both direct and indirect costs, whereas the question specifically asks for directly related production costs. Option D is incorrect as inventory expenses only relate to the cost of acquiring and holding inventory, not to the production itself.

In Manufacturing,all Costs Directly Related to Production,including Raw Materials,labour,and Factory