Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials cost, direct labor cost, or factory overhead cost:
a. Steering wheel
b. Salary of test driver
c. Depreciation of welding equipment
d. V8 automobile engine
e. Wages of assembly line worker
f. Steel used in body
g. Tires
h. Assembly machinery lubricants
Answer:
a. Direct materials cost
b. Factory overhead cost
c. Factory overhead cost
d. Direct materials cost
e. Direct labor cost
f. Direct materials cost
g. Direct materials cost
h. Factory overhead cost