Factory cost
Production cost
Direct cost
None of these
Answer is Right!
Answer is Wrong!
The correct answer is: B. Production cost
Factory cost is the cost of direct materials, direct labor, and factory overhead. Administrative overhead is the cost of indirect expenses that are not directly related to the production of goods or services.
Production cost is the total cost of producing a product or service. It includes the cost of materials, labor, and overhead. Overhead is the cost of indirect expenses that are not directly related to the production of goods or services. These costs can include things like rent, utilities, and insurance.
The sum of factory cost and administrative overhead is called production cost. This is the total cost of producing a product or service.
Here is a brief explanation of each option:
- Factory cost is the cost of direct materials, direct labor, and factory overhead. Direct materials are the materials that go into the finished product. Direct labor is the labor that is directly involved in the production of the finished product. Factory overhead is the indirect costs of production, such as rent, utilities, and insurance.
- Production cost is the total cost of producing a product or service. It includes the cost of materials, labor, and overhead. Overhead is the cost of indirect expenses that are not directly related to the production of goods or services. These costs can include things like rent, utilities, and insurance.
- Direct cost is the cost of the materials and labor that are directly involved in the production of a product or service. It does not include the cost of indirect expenses, such as rent, utilities, and insurance.
- None of these is not the correct answer.