Question: By definition, direct material and direct labor costs can be traced directly to the products for which they were incurred; the cost accounting system does

By definition, direct material and direct labor costs can be traced directly to the products for which they were incurred; the cost accounting system does this. However, production overhead, which is an indirect cost, cannot be so traced. The cost of heating a shoe factory [can /

cannot] be traced directly to the cost of manufacturing each pair of shoes made in the factory, in most cases. Assigning these indirect costs to products requires the use of an overhead rate .

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Essentials Accounting Questions!