The total cost for sofa chair production is the summation of direct materials, direct labor, and manufacturing overhead consumed during a given period. The direct materials will be directly processed into the finished products. Typically, the cost of the materials reflects the quality of the finished products in some way. As for direct labor, it includes not only the basic salaries and wages of all the workers employed in the manufacturing department but also any incentives and benefits they receive. Manufacturing overhead, by far is the final but also the most time-consuming determining the total cost of manufacturing. In conclusion, the total cost is priced considering each and every step of the above expenses incurred.
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