Use the Information Below to Answer the Following Questions

question 58

Multiple Choice

Use the information below to answer the following questions.
Jan runs a successful hairdressing salon in the CBD. The type of costs incurred in providing services to clients are:
(i) hairdressers' salaries
(ii) shampoo and conditioner (no individual records kept of usage)
(iii) colour and perm solutions (individual records kept of usage per client)
(iv) electricity and gas
(v) depreciation of equipment
-Refer to the information above. The direct costs incurred in providing a haircut only to a client would be:

• A) hairdresser salary.
• B) hairdresser salary, shampoo and conditioner.
• C) all costs mentioned above.
• D) hairdresser salary, shampoo and conditioner and electricity and gas.

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Definitions:

Machine-Hours

A measure of production volume or activity based on the number of hours machines are operated.

Machine-Hours

A measurement used in cost accounting to allocate expenses to products or job orders, based on the number of hours machines are operated.

Direct Labor-Hours

An indicator of the cumulative hours spent by workers directly engaged in the production process.

Estimated Total Manufacturing Overhead

The projected sum of all indirect costs associated with the production process, not inclusive of direct labor or materials.