Product Cost Components

The video tutorial explains the concept of product costs, which include direct labor, direct materials, consumable supplies, and factory overhead. It highlights the differences between product and service costs, emphasizing labor as the primary cost driver in services. The tutorial also discusses the allocation of indirect costs and the components of product costs, which encompass both direct and indirect expenses.

Which of the following is NOT typically included in product costs?

• Direct labor

• Direct materials

• Marketing expenses

• Factory overhead

What is considered the primary cost driver in service costs?

• Factory overhead

• Consumable supplies

• Direct materials

• Labor

Which of the following is an example of an indirect cost in service delivery?

• Raw materials

• Employee benefits

• Direct labor

• Overhead

What term is used to describe costs that occur regardless of production?

• Indirect costs

• Direct costs

• Variable costs

• Fixed costs

In the context of product and service costs, what does the term 'value proposition' refer to?

• The total cost of production

• The benefits provided to employees

• The overhead expenses

• The value offered to customers