Which One of the Following Examples Could Be Classified as a Direct

question 36

Multiple Choice

Which one of the following examples could be classified as a direct cost?

• A)The costs of an entire factory's electricity related to a product; the product line is the cost object.
• B)The printing costs incurred for payroll cheque processing; the payroll cheque processing is the cost object.
• C)The salary of a maintenance supervisor in the manufacturing plant; Product A is the cost object.
• D)The costs incurred for electricity in the office; the accounting office is the cost object.
• E)The cost of advertising the products.

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Definitions:

Minimum Inventory

The lowest quantity of stock that must be kept on hand to prevent stockouts, taking into account lead times and demand variability.

Perfect System

An idealized or hypothetical system that operates without any faults, failures, or inefficiencies.

Raw Materials

The unprocessed natural resources or substances that are used in the manufacturing of goods, providing the basic material from which products are made.

Finished Products

Goods that have completed the manufacturing process but have not yet been sold or distributed to the end user.