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

The cost of the soap used to wash the denim cloth is an indirect material cost, as it is not directly incorporated into the finished product (the jeans). Therefore, option C, indirect materials, is the best choice. Option A, direct labor, and Option B, direct materials, are not appropriate because they do not accurately capture the nature of the cost. Option D, manufacturing overhead, is a broader category that includes indirect materials as well as other indirect costs such as factory rent and utilities. While option D could be used to describe the cost of the soap, it is not the most specific or accurate description.

Corcetti Company Manufactures and Sells Prewashed Denim Jeans