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) Varnish for coating
D) Cost of interior upholstery

Question

Quizplus · Accepted Answer

The cost of interior upholstery is a direct material cost for an automobile manufacturer as it is a component of the finished product (the automobile). Choice A is an indirect material cost as it is used in the production process but is not part of the finished product. Choice B is a direct labor cost as it relates to the wages of an employee involved in the production process. Choice C is also an indirect material cost as it is not part of the finished product but is used in the production process.

Which of the Following Is an Example of Direct Materials