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:

Direct Approach

A method of presenting the cash flow statement where major classes of gross cash receipts and gross cash payments are disclosed, offering transparency in financial reporting.

Comprehensive Income

The total change in equity for a reporting period other than transactions from owners, encompassing all recognized income and expenses.

FVTOCI

An acronym for Fair Value Through Other Comprehensive Income, a classification under IFRS accounting standards for financial assets held for purposes other than trading, where changes in fair value are recognized in other comprehensive income rather than profit or loss.

Equity Method

An accounting technique used to assess the profits earned by investments in other companies, reflecting the profit in proportion to shares held.