Because of automation, which component of product cost is declining?

a. Manufacturing overhead
b. Direct materials
c. Advertising
d. Direct labor


Answered 7 months ago
Answered 7 months ago

Product costs are costs directly connected with the production process. Examples are direct material, direct labor, and manufacturing overheads. The overhead cost, in turn, includes factory depreciation, rates, and taxes.

The product cost that is being reduced as a result of automation is direct labor.

Industrial automation refers to the application of information technologies and control systems, such as computers or robots, to aid in the manufacture and maintenance of goods, hence reducing direct labor costs.

Therefore, the correct option is D.

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