Managers of a discount store chain are considering whether to add a new auto service department.In reaching this decision,the managers should consider:
A) Direct costs only.
B) Both direct and indirect costs.
C) Neither direct nor indirect costs.
D) Indirect costs but not direct costs.

Question

Quizplus · Accepted Answer

In order to make a well-informed decision, the managers should consider both direct costs (such as wages, supplies, and equipment) and indirect costs (such as utility bills, rent, and advertising). Ignoring either type of cost could result in an incomplete or flawed analysis, which could lead to a poor decision. Therefore, it is best to consider both direct and indirect costs.

Managers of a Discount Store Chain Are Considering Whether to Add