Company X manufactures 3-ring notebooks.All of the following are considered indirect costs except:
A) cardboard used in production of the notebooks.
B) depreciation on manufacturing equipment.
C) factory utilities.
D) salaries for production supervisors.

Question

Quizplus · Accepted Answer

Cardboard used in production of the notebooks is a direct cost as it is directly used in the manufacturing process. Indirect costs are those that cannot be directly traced to a specific product or service, such as depreciation on manufacturing equipment, factory utilities, and salaries for production supervisors.

Company X Manufactures 3-Ring Notebooks