Which of the following costs would be classified as a direct cost for a manufacturing company?
Practice Questions
1 question
Q1
Which of the following costs would be classified as a direct cost for a manufacturing company?
Factory rent
Direct labor
Depreciation on factory equipment
Utilities for the factory
Direct labor costs can be directly traced to the production of specific goods.
Questions & Step-by-step Solutions
1 item
Q
Q: Which of the following costs would be classified as a direct cost for a manufacturing company?
Solution: Direct labor costs can be directly traced to the production of specific goods.
Steps: 4
Step 1: Understand what a direct cost is. A direct cost is an expense that can be directly linked to the production of a specific product or service.
Step 2: Identify examples of direct costs. Common examples include direct materials (like wood for furniture) and direct labor (like wages for workers making the furniture).
Step 3: Focus on direct labor costs. Direct labor costs refer to the wages paid to workers who are directly involved in making the product.
Step 4: Conclude that direct labor costs are a direct cost because they can be traced back to the production of specific goods.
