Use the information below to answer the following questions.
Scott's Fencing constructs paling fences. During last month, the fencing division erected 4,000 metres of fencing. The costs incurred by the division were as follows: $$\begin{array} { l r }
\text { Palings } & \$ 4,000 \
\text { Posts } & \$ 5,000 \
\text { Nails (no usage records) } & \$ 500 \
\text { Cement (no usage records) } & \$ 500 \
\text { Wear and tear on equip. } & \$ 2,000
\end{array}$$
-Refer to the table above. The total direct costs incurred in erecting the 4,000 metres of fencing is:
A)$11,000.
B)$9,000.
C)$9,500.
D)$10,000.

Question

Use the information below to answer the following questions.
Scott's Fencing constructs paling fences. During last month, the fencing division erected 4,000 metres of fencing. The costs incurred by the division were as follows: $$\begin{array} { l r } 
\text { Palings } & \$ 4,000 \
\text { Posts } & \$ 5,000 \
\text { Nails (no usage records) } & \$ 500 \
\text { Cement (no usage records) } & \$ 500 \
\text { Wear and tear on equip. } & \$ 2,000
\end{array}$$
-Refer to the table above. The total direct costs incurred in erecting the 4,000 metres of fencing is:
A)$11,000.
B)$9,000.
C)$9,500.
D)$10,000.

Quizplus · Accepted Answer

Direct costs are those that can be directly attributed to the production of a specific good or service. In this case, the costs for palings and posts can be directly attributed to the construction of the fencing, totaling $4,000 + $5,000 = $9,000. Nails, cement, and wear and tear on equipment are considered indirect costs because they cannot be directly attributed to the production of a specific length of fencing or may be used in a manner that is not directly quantifiable per project.

Use the Information Below to Answer the Following Questions -Refer to the Table Above