Which of the following is correct with respect to direct materials and manufacturing overhead?

A. MO is usually a significant, identifiable part of the product. DM is often not a significant part of the product. B. MO costs may be difficult to trace to the individual product. DM costs are also difficult to trace, just not as difficult as MO. C. If MO is actually traceable to the individual product, it may be impractical to do so.

D. DM-related costs are usually present on the plant floor. MO costs are not.

A worker is responsible for answering the phone in the accounting office of a custom rocking chair manufacturing company. The employees time is handled as a product cost during the current period. This would result in

A. overstated COGS if the inventory is sold immediately after the entry. B. an understated inventory balance right after the journal entry is made for the employees time.

C. a cost accounting vortex, from which there is no escape.

D. the realization that no error has been made.