ECONOMICS

Detailed explanation-1: -Answer and Explanation: The correct option is (d) Depreciation on delivery vehicles. Delivery vehicles are related to sales and not manufacturing, hence cost on delivery vehicles would be classified as selling and administrative expenses and not as manufacturing costs.

Detailed explanation-2: -Manufacturing overhead does not include any of the selling or administrative functions of a business. Thus, the costs of such items as corporate salaries, audit and legal fees, and bad debts are not included in manufacturing overhead.

Detailed explanation-3: -Manufacturing overhead costs are called indirect costs because it’s hard to trace them to each product. These costs are applied to the final product based on a pre-determined overhead absorption rate.

Detailed explanation-4: -Answer and Explanation: The correct answer is that a) cost of goods sold is not a manufacturing cost category. Adding up the direct materials, direct labor, and manufacturing overhead costs gives us the total manufacturing costs for the year.