Question

Corcetti Company manufactures and sells prewashed denim jeans. Large rolls of denim cloth are purchased and are first washed in a giant washing machine. After the cloth is dried, it is cut up into jean pattern shapes and then sewn together. The completed jeans are sold to various retail chains. Which of the following terms could be used to correctly describe the cost of the thread used to sew the jeans together?Direct Cost Product Cost A) Yes Yes B) Yes No C) No Yes D) No No

Answer 1

The answer is: A) Yes : Yes

Step-by-step explanation:

The thread used to sew the jeans together is a direct material used in the production of the jeans.

A direct cost is a cost that can be traced to the production of a good or service, for example direct labor and direct materials.

A product cost is a cost incurred in the production of a good or service, it includes both direct and indirect costs (depreciation, supervisors, etc.).