Use the information below to answer the following questions.
Jan runs a successful hairdressing salon in the CBD. The type of costs incurred in providing services to clients are:
i)Hairdressers' salaries
ii)Shampoo and Conditioner
(no individual records kept of usage)
iii)Colour and Perm Solutions
(individual records kept of usage per client)
iv)Electricity and Gas
v)Depreciation of equipment
-Refer to the information above. The direct costs incurred in providing a haircut only to a client would be:
A)all costs mentioned above.
B)hairdresser salary, shampoo and conditioner.
C)hairdresser salary, shampoo and conditioner and electricity and gas.
D)hairdresser salary.

Question

Quizplus · Accepted Answer

Direct costs are those that can be directly attributed to the production of a specific good or service. In the context of providing a haircut, the hairdresser's salary is the only cost that can be directly attributed to the service provided to a specific client. Shampoo and conditioner, while used, are not tracked per client and are therefore considered indirect costs, similar to electricity, gas, and depreciation of equipment.

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