Which of the Following Is an Example of a Direct

question 7

Multiple Choice

Which of the following is an example of a direct cost?

• A) electricity
• B) human resource staff
• C) medications
• D) secretaries

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales, remaining constant over a specified period.

Contribution Margin Ratio

A financial metric that measures the proportion of revenue remaining after variable costs have been deducted, indicating how much revenue is available to cover fixed costs and generate profit.

Fixed Expenses

Costs that do not change with the level of production or sales over a short period, such as rent, salaries, and insurance.

Sales Mix

The combination of products or services that a company sells, typically influencing the company's profits and strategy.