Question

In: Accounting

Should software and manufacturing overhead such as factory mortgage payments and insurance be allocated to the iPhone product costs (aka inventoriable cost) and why?

Should software and manufacturing overhead such as factory mortgage payments and insurance be allocated to the iPhone product costs (aka inventoriable cost) and why? 

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Expert Solution

Yes, software and manufacturing overhead are to be included in the cost of iphones as the software is integral feature of iphone without software iPhone will not work at all.similarly the manufacturing overhead are indirect costs that are incurred in relation to manufacture of products at factory, so along with direct material and direct labour manufacturing costs are to be assigned to each product produced.

The above answer is based on my opinion


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