The accounting department at Cathy's Cupcakes has been asked to determine the company's direct costs. In this scenario, the accountants will look at what the company spent on baking supplies, muffin pans, and counter assistance.

Question

Quizplus · Accepted Answer

Direct costs are the expenses directly related to producing a good or service, including raw materials, labor, and expenses related to the production process. In this scenario, the expenses on baking supplies, muffin pans, and counter assistance are directly related to producing and selling cupcakes, and thus can be considered direct costs.

The Accounting Department at Cathy's Cupcakes Has Been Asked to Determine