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.

---

Definitions:

Decreasing Rate

A situation where the rate of growth or progression reduces over time.

Total Fixed Costs

The sum of all costs that do not change with the level of output, such as rent, salary, and insurance premiums.

Earrings

Jewelery pieces worn on the ear, typically fastened through a hole pierced in the earlobe or another external part of the ear.

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the cost per unit.