Question

6) Custom home operates three different departments. The company makes decorative comforters, pillowcases, and tablecloths in a small factory. The company expects to make 2,000 comforters during the current year. With respect to the comforters, how would the factory supervisory salaries be classified

Answer 1

Answer: B. Indirect and fixed

Step-by-step explanation:

Direct costs in the production of 2,000 comforters would be those that were needed to convert the materials needed in the production to finished comforters such as clothing and assembly labor.

A factory supervisor is not directly involved in this process as their job is simply to monitor workers. They are therefore an indirect cost. The salaries do not change based on the level of production so these costs are fixed as well.