Question

Which of the following costs would be classified as a direct cost for a company that produces motorcycles?

A. Rent of manufacturing facility that produces motorcycles

B. Seats used in the motorcycles

C. Wages of motorcycle assembly workers

D. Both Seats used in the motorcycles and Wages of motorcycle assembly workers are corre

Answer 1

D. Both Seats used in the motorcycles and Wages of motorcycle assembly workers are corre ct

Step-by-step explanation:

The direct cost is that cost which is directly related to the production process of a product

The examples - direct material cost, direct labor cost, etc

Since the seats are required to make the motorcycle, and the assembly workers wages are considered so that the labor can make the motorcycle a finished product

And, the rent of the manufacturing facility is an indirect cost which is not included in the direct cost