Question

An automobile mechanic works exclusively in the repair department of an automotive dealership. Which of the following statements is true about the mechanic's salary?

a. If the cost object is the dealership, the salary is a direct cost.
b. If the cost object is the repair department, the salary is a direct cost.
c. If the cost object is a job done by the mechanic, the salary is an indirect cost.
d. All the above are true.

Answer 1

All the above statements are true regarding the mechanic's salary in different cost objects.

Step-by-step explanation:

In the context of an automotive dealership, the cost object can be either the dealership as a whole, the repair department, or a specific job done by the mechanic. Based on this, the statements in options a, b, and c are all true.

If the cost object is the dealership, then the mechanic's salary is considered a direct cost because it is directly attributable to the overall operation of the dealership.

If the cost object is the repair department, then the mechanic's salary is also a direct cost because it is directly incurred by the repair department.

If the cost object is a specific job done by the mechanic, then the mechanic's salary becomes an indirect cost because it cannot be directly traced to individual jobs.

Therefore, the correct answer is d. All the above are true.