Which of the Following Is a Direct Cost of Manufacturing

question 142

Multiple Choice

Which of the following is a direct cost of manufacturing a table made of wood and glass,for a firm that manufactures furniture?

• A)The cost of the wood in the table.
• B)The cost of rent on the factory where the table is manufactured.
• C)The salary of the supervisor who oversees all production for the firm.
• D)Depreciation on the tools used to manufacture the table.

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Definitions:

Mixed Costs

Expenses that have both fixed and variable components, changing in total with the level of activity but not in proportion.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not affect future business decisions.

Mixed Cost

A cost that contains both variable and fixed cost components, changing in total with volume but remaining constant per unit.

Variable Cost

Costs that change in proportion to the good or service that a business produces, such as raw materials and direct labor expenses.