Classify each of the following costs as direct or indirect as it relates to one Best Buy retail location: CFO salary, that Best Buy's sales associates, that Best Buy's property insurance, and the legal department for Best Buy.
A)direct, indirect, indirect, and direct
B)indirect, direct, direct, and indirect
C)all are indirect
D)all are direct

Question

Quizplus · Accepted Answer

- CFO salary is an indirect cost as it is not directly related to the operations of one Best Buy retail location.
- Best Buy's sales associates' salaries are direct costs as they are directly related to the operations of one retail location.
- Best Buy's property insurance is a direct cost as it specifically relates to insuring the property of one retail location.
- The legal department for Best Buy is an indirect cost as it supports the overall operations of the company, rather than being directly related to one retail location.

Classify Each of the Following Costs as Direct or Indirect