Corcetti Company manufactures and sells prewashed denim jeans. Large rolls of denim cloth are purchased and are first washed in a giant washing machine. After the cloth is dried, it is cut up into jean pattern shapes and then sewn together. The completed jeans are sold to various retail chains.
-Which of the following terms could be used to correctly describe the cost of the soap used to wash the denim cloth?

Question

Quizplus · Accepted Answer

Choice C (direct materials) would be the best choice, as the soap used in the washing machine is a direct material that can be easily traced back to the finished product (the prewashed denim jeans). Choices A (indirect materials) and B (indirect labor) do not directly relate to the cost of the soap used for washing the denim cloth. Choice D (factory overhead) could be a possible option if the cost of the soap was part of a larger overhead cost, but it is not clear from the information given.

Corcetti Company Manufactures and Sells Prewashed Denim Jeans