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Manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead.
Manufacturing Costs
Costs directly associated with manufacturing products, encompassing raw materials, workforce expenses, and manufacturing facility costs.
Direct Materials
Raw materials that are directly traceable to the manufacturing of a product and represent a significant portion of the production cost.
Manufacturing Overhead
Manufacturing overhead includes all the indirect costs associated with the production process, such as utilities, maintenance, and salaries for managers.
- Gauge the role of raw materials, direct labor, and overhead costs in establishing the price of final products.
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Learning Objectives
- Gauge the role of raw materials, direct labor, and overhead costs in establishing the price of final products.
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