Which of the following items is a direct cost?

a) Customer service costs in a multi-product firm when Product A is the cost object

b) Printing costs incurred for payroll check processing when payroll check processing is the cost object

c) The salary of a maintenance supervisor in a multiproduct firm when Product B is the cost object

d) Utility costs of the administrative office when the accounting department is the cost object

e) None of the above

Question

Business

Asia Trevino

1 November, 21:38

Which of the following items is a direct cost?

a) Customer service costs in a multi-product firm when Product A is the cost object

b) Printing costs incurred for payroll check processing when payroll check processing is the cost object

c) The salary of a maintenance supervisor in a multiproduct firm when Product B is the cost object

d) Utility costs of the administrative office when the accounting department is the cost object

e) None of the above

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Answers (1)

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Kristin Underwood · Answer 1

e) None of the above

Explanation:

We have different ways of classifying costs depending on the goal that is to be achieved. Costs basically fall into two categories, direct costs and indirect costs. Direct costs are costs that are exclusively incurred for the purpose of producing or buying a certain good or service, in fact, the cost came into being because of the existence of whatever is being costed. any cost that is not direct cost is indirect cost.

None of the costs in the question can be termed direct cost