Question

When using normal costing, the total production cost of a job is composed of:Multiple Choicedirect material, direct labor, manufacturing overhead, and outlays for selling costs.direct material, direct labor, and applied manufacturing overhead.direct material, direct labor, and actual manufacturing overhead.direct material and direct labor, only.direct material, direct labor, manufacturing overhead, and outlays for both selling and administrative costs.

Answer 1

Answer:

The correct answer is letter "B": direct material, direct labor, and applied manufacturing overhead.

Explanation:

Normal costing is the process of assigning inherent expenditures of productions to the items being manufactured. In essence, those costs are raw materials and labor. In cost accounting terms, they are assigned per unit as direct materials and direct labor.

Besides, normal costing includes manufacturing overhead which refers to the costs of production that are not easy to be traced such as depreciation, rent or utilities. Thus, normal costing is composed of direct materials, direct costs, and manufacturing overhead.