Classify Each of the Following Costs as Direct or Indirect

question 75

Multiple Choice

Classify each of the following costs as direct or indirect as it relates to one Best Buy retail location: CFO salary, that Best Buy's sales associates, that Best Buy's property insurance, and the legal department for Best Buy.

• A)direct, indirect, indirect, and direct
• B)indirect, direct, direct, and indirect
• C)all are indirect
• D)all are direct

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Definitions:

Cash Discounts

A reduction in the invoice price offered by sellers to buyers for prompt payment of their bill.

Interest Days

The number of days over which interest is calculated on a loan or investment.

Non-Interest-Bearing Note

A financial instrument that does not accrue interest over time, meaning the borrower pays back only the principal amount borrowed.

Discount Rate

The interest rate charged by central banks on loans to commercial banks or the rate used in discounted cash flow analysis to determine the present value of future cash flows.