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The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.
Manufactured Product
A product that has been processed or constructed through industrial or manufacturing operations.
Direct Materials Cost
Direct materials cost represents the total cost of raw materials directly used in the production of a product, crucial for calculating the cost of goods sold.
Factory Overhead Cost
Indirect costs related to manufacturing that are not directly traceable to a product, including costs for maintenance, utilities, and indirect labor.
- Identify the differences between direct materials, direct labor, and factory overhead as distinct cost types.
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Learning Objectives
- Identify the differences between direct materials, direct labor, and factory overhead as distinct cost types.
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