Classify the Following Costs as Direct, Indirect, or Neither

question 19

Essay

Classify the following costs as direct, indirect, or neither: $$\begin{array} { | l | l | } \hline \text { a) } & \text { labor for machine maintenance } \\\hline \text { b) } & \text { factory equipment depreciation } \\\hline \text { c) } & \text { materials not traceable to specific products } \\\hline \text { d) } & \text { office equipment depreciation } \\\hline \text { e) } & \text { materials traceable to specific products } \\\hline \text { f) } & \text { insurance expired on admini strative facilities } \\\hline \text { g) } & \text { product assembly labor incurred } \\\hline \text { h) } & \text { administrative office salaries } \\\hline \text { i) } & \text { salespersons' salaries } \\\hline \text { j) } & \text { utilities on factory building } \\\hline \text { k) } & \text { putilities on administrative facilities } \\\hline\end{array}$$

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Definitions:

Vega

The response of option price to a change in the standard deviation of the underlying asset.

Option's Price

The price at which a specific derivative contract can be exercised, determined by factors like the underlying asset's price, time to expiration, and volatility.

Volatility

The rate at which the price of a security increases or decreases for a given set of returns.

Time Value

The idea that having money now is more valuable than having the same amount later on because of its ability to generate earnings over time.