Which of the following items is not an example of a direct cost in the production of a refrigerator?
A)Raw materials.
B)The cost of a machine used only for manufacturing this line of refrigerators.
C)Salary of factory assembly line workers.
D)Maintaining the sales office.
E)All of the above could be direct costs.

Question

Quizplus · Accepted Answer

Direct costs are those costs directly related to the production of a specific product or service. Raw materials, a machine solely used for manufacturing the refrigerators, and the salary of assembly line workers are all costs directly related to the production of refrigerators. Maintaining the sales office, however, is not directly related to the production of the refrigerators and would be considered an indirect cost.

Which of the Following Items Is Not an Example of a Direct