Custom Quilters makes decorative comforters, quilted garments, and other products in a small sewing factory. In 2014, the company expects to make 2,000 comforters. With respect to the comforters, how would the supervisory salaries be classified?
A) Direct and variable
B) Direct and fixed
C) Indirect and variable
D) Indirect and fixed

Question

Quizplus · Accepted Answer

Supervisory salaries are indirect costs as they cannot be directly traced to the production of the comforters. Since the company expects to make a fixed number of comforters (2,000), the supervisory salaries would be classified as fixed costs.

Custom Quilters Makes Decorative Comforters, Quilted Garments, and Other Products