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Many companies recognize three major categories of costs of manufacturing a product. These are direct materials, direct labor, and overhead. Which of the following is an overhead cost in the production of an automobile?

a) The cost of small tools used in mounting tires on each automobile.
b) The cost of the tires on each automobile.
c) The cost of the laborers who place tires on each automobile.
d) The delivery costs for the tires on each automobile.

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Answer:

a)

Explanation:

a) is the overhead cost

b) are direct materials

c) is direct labor cost

d) is the overhead cost

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