Which of the following should be classified as production costs?
A) Direct materials and selling costs.
B) Direct labor and administrative costs.
C) Manufacturing overhead and selling and administrative costs.
D) Direct materials, direct labor, and selling and administrative costs.
E) Direct materials, direct labor, and manufacturing overhead.

Question

Quizplus · Accepted Answer

Production costs are costs directly related to the manufacturing process, including direct materials, direct labor, and manufacturing overhead. Selling and administrative costs are considered period costs as they are incurred in relation to the overall operation of the business and not specifically related to the production process.

Which of the Following Should Be Classified as Production Costs