Which of the Following Is an Example of Direct Materials

question 41

Multiple Choice

Which of the following is an example of direct materials cost for an automobile manufacturer?

• A) Cost of oil lubricants for factory machinery
• B) Cost of wages of assembly worker
• C) Salary of production supervisor
• D) Cost of interior upholstery

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Definitions:

Depreciation

The planned apportionment of the price of a tangible asset across its operational lifetime.

Capital Spending

Capital deployed by a business for the purchase or enhancement of physical properties, such as premises, workshops, or apparatus.

Inventory Requirements

The specific amount of stock that a company needs to have on hand to meet customer demand and support production processes.

Sunk Cost

A past expense that has already been incurred and cannot be recovered, which should not influence future business decisions.