Which of the following is a typical direct cost category?
A) Material Included in Product
B) Engineering Overhead
C) Material Overhead
D) Manufacturing Overhead
E) General and Administrative

Question

Quizplus · Accepted Answer

Material included in product is a typical direct cost category as it directly relates to the product being produced. Direct costs are costs that can be easily traced to the production of a specific good or service. Examples include raw materials, labor, and direct expenses such as shipping and handling.

Other options listed such as engineering overhead, material overhead, manufacturing overhead, and general and administrative costs are considered indirect costs as they do not directly relate to the production of a specific good or service. They may still contribute to the overall cost of production, but they are not considered direct costs.

Which of the Following Is a Typical Direct Cost Category