Question

7. A manufacturing plant produces two product lines: golf equipment and soccer equipment. An example of a direct cost for the golf equipment line is A) beverages provided daily in the plant break room for the entire staff B) monthly lease payments for a specialized piece of equipment needed to manufacture the golf driver C) salaries of the clerical staff that work in the company administrative offices D) overheads incurred in producing both golf and soccer equipment

Answer 1

Answer:

Correct option is B.)

Monthly lease payment for a specialized piece of equipment needed to manufacture the golf driver.

Explanation:

Direct cost are those cost which is Directly attributable to conversion of raw material into finished goods such as Raw materials , Direct labor and Direct expense.

Monthly lease payment is Direct expense hence it is charged for the manufacturing of golf equipment.

Note:

Beverages , staff salaries and common overhead are indirect cost.

Answer 2

Option B.

It is directly associated with the golf product.