An Individual Pays $100 Every Month as Rent for an Apartment,and

question 74

Multiple Choice

An individual pays $100 every month as rent for an apartment,and his monthly opportunity cost of commuting from the apartment to his place of work is $40.Which of the following statements is then true?

• A) The direct cost of renting the apartment is $140
• B) The indirect cost of renting the apartment is $140
• C) The direct cost of renting the apartment is $40, whereas the indirect cost of renting the apartment is $100
• D) The direct cost of renting the apartment is $100, whereas the indirect cost of renting the apartment is $40

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Definitions:

Indirect Materials

Indirect materials are supplies used in the production process but not directly traceable to individual goods or services.

Job Cost Sheets

Documents that track the direct materials, direct labor, and manufacturing overhead for a specific job in a manufacturing process.

Time Tickets

Documents used to record the amount of time an employee spends on various tasks, often used for payroll or job costing.

Direct Labor

The wages and related benefits of employees who are directly involved in the production of goods or services.