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Direct expenses are those which can be identified with particular products. Which of the following items is a direct cost?

a. The rent of the factory in which products are made. b. The wages of the production supervisor. c. A royalty paid to the holder of a patent after each item is produced. d. The cost of the glue used to attach labels to the products.

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Question added by Deleted user
Date Posted: 2013/08/22
Emad Ramadan
by Emad Ramadan , Internal Auditor , Liptis Egypt for Pharmaceuticals & Medical Products S.A.E

c.
A royalty paid to the holder of a patent after each item is produced.
 

Asif Ahmed Awan
by Asif Ahmed Awan , Manager Finance & Admin , Indus Crafts Foundation (ICF)

Rent of the factory will be Factory overhead therefore not a irect cost royalities paid are also not attributable to unit products there for i think answer can be from B or D  

Khalid Noor
by Khalid Noor , Accounting Manager , FedEx

Rent is indirect because it does not directly attribute to the product.
The rest are direct costs because without it the product shall not be completed.

هشام عبدالله خليفه محمد
by هشام عبدالله خليفه محمد , Senior Accountant , Al Watania Paper Product Co

a.
The rent of the factory in which products are made.

Basem Eljammal
by Basem Eljammal , Senior Accountant , ISAM KABBANI & PARTNERS GROUP FOR CONSTRUCTION AND MAINTENANCE CO. LTD.

In this case we can distinct betwwen direct / indirect costs as follows :-  Direct costs are :-  c.
  royalty paid to the holder of a patent after each item is produced.
Indirect costs are :-  a.
The rent of the factory in which products are made.
b.
The wages of the production supervisor.
d.
The cost of the glue used to attach labels to the products.

Deleted user
by Deleted user

Option d   The cost of the glue used to attach labels to the products.

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