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 thread used to sew the jeans together?

Question

Quizplus · Accepted Answer

The cost of the thread used to sew the jeans together would be considered a direct material cost, as it can be traced directly to the cost of producing the finished jeans. Option A (direct labor cost) would refer to the cost of the laborers who sewed the jeans together, not the cost of the materials used. Option C (manufacturing overhead cost) would refer to indirect costs associated with manufacturing, such as rent and utilities, not the cost of the thread. Option D (selling and administrative cost) would refer to costs associated with selling and distributing the jeans to retail chains, not the cost of producing them.

Corcetti Company Manufactures and Sells Prewashed Denim Jeans