Question

Vladimir tells you about two types of cost: direct and indirect. Sort the costs into the appropriate buckets.

1. Wood for construction
2. Windows
3. Architectural fees
4. Recording fees
5. Electrician

Answer 1

The student's question about classifying costs into direct and indirect categories is addressed by sorting the given costs accordingly. Wood for construction, windows, and the electrician are direct costs, while architectural and recording fees are indirect costs.

Step-by-step explanation:

The question asks for categorization of various costs into direct or indirect costs, which is a concept used in managerial accounting and cost accounting within the field of business. In this answer, we’ll organize the costs provided by the student into direct or indirect categories based on their relationship to the production and service processes.

Direct Costs:

• Wood for construction
• Windows
• Electrician

Indirect Costs:

• Architectural fees
• Recording fees

Direct costs are those that can be directly traced to a product or a specific job, such as the materials and labor used in construction. Indirect costs are those that cannot be directly traced to a product or a specific job and are typically spread over multiple projects, like architectural design fees or costs associated with legal activities (recording fees).