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"I haven't missed a day of work in the past year, and I'm committed to this company, so I determined that a 20 percent salary increase is warranted for reasons of fairness," said Turner to his supervisor, Lillian. In reply, Lillian asked, "How did you determine that a 20 percent salary increase is fair?" If Turner had used equity theory as a basis for his request, he would have replied, "To determine a proper salary increase,
Direct Expenses
Costs that can be directly tied to the production of specific goods or services, such as raw materials and labor.
Indirect Expenses
Costs that are not directly attributable to a specific cost object, such as a product or department, including utilities, rent, and administrative salaries.
Administrative Costs
Expenses related to the general operation of a business, including salaries of executive officers, legal and clerical work, and office supplies.
Maintenance Expenses
Costs incurred to keep an asset in working condition or to maintain its operational efficiency.
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