The PC Works assembles custom computers from components supp

The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that are incurred at the company Required: For each cost, Indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, selling, or an administrative cost

Solution

Depreciation on equipment used to test assemled computers before release to customers is a part of manufacturing overhead cost. It is an indirect cost incurred in the manufacturing activity. Option 3 is correct