Question

A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)

Select one:

a. manufacturing overhead.

b. administrative expense.

c. supplies expense.

d. period cost.

e. direct material

Answer 1

The answer will be option (a) Manufacturing overhead. It is because the glue which is used in the production process is a type of indirect material because indirect materials like glue are materials that are used in the production process but are not directly traceable to the product. The glue which is used in the manufacturing process is a very small amount and it is not directly traceable to the product. So it is a type of indirect material. Indirect material forms a part of manufacturing overhead because manufacturing overhead includes all indirect costs incurred during the production process. Manufacturing overhead are all manufacturing costs that are related to the cost object but cannot be traced to that cost object in an economically feasible way which is the case with the glue. The answer is not option (b) because the expense is related to manufacturing. The answer is not option (c) because the expense is not incidental rather it is required in every product. The answer is not option (d) because the expense is not related to selling, administrative or interest expenses. The answer is not option (e) because the expense is not directly traceable to the product.