Asked by Shannon Prince on Mar 10, 2024

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If the cost of materials is not a significant portion of the total product cost, the materials may be classified as part of factory overhead cost.

Factory Overhead

Refers to all the indirect manufacturing costs, such as utilities and rent for the production facilities, which are not directly tied to individual products.

Total Product Cost

The full cost incurred to manufacture or acquire a product, including material, labor, and overhead expenses, up to the point of sale.

Materials Cost

The expense incurred for materials that are used in the production of goods or services.

  • Understand the classification of manufacturing costs into direct materials, direct labor, and factory overhead.
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CH
Caseigh Hickman

Mar 10, 2024

Final Answer :
True
Explanation :
If the cost of materials is not a significant portion of the total product cost, they may be included as part of the factory overhead cost rather than being separately identified as direct materials cost. This is because the costs cannot be easily traced directly to a specific product or process.