Peter is the manager of the window manufacturing department in a construction business.Which cost would not be classed as a direct cost of the window manufacturing process?
A) Timber for the window frames.
B) Glass for the window panes.
C) Wages of tradesmen.
D) Depreciation of tools and equipment.

Question

Quizplus · Accepted Answer

Direct costs are costs that can be directly traced to the production of a specific good or service. Timber and glass are direct costs as they are raw materials used in the manufacturing process. Wages of tradesmen are also direct costs as they are directly involved in the production process. However, depreciation of tools and equipment is an indirect cost as it is not directly associated with the production of a specific unit of the product but rather the overall manufacturing process.

Peter Is the Manager of the Window Manufacturing Department in a Construction