The Gray Company has a staff of five clerks in its general accounting department.Three clerks who work during the day perform sundry accounting tasks; the two clerks who work in the evening are responsible for (1) collecting the cost data for the various jobs in process, (2) verifying manufacturing material and labor reports, and (3) supplying production reports to the supervisors by the next morning.The salaries of these two clerks who work at night should be classified as:
A)Period costs.
B)Direct costs.
C)Product costs.
D)Indirect costs.

Question

Quizplus · Accepted Answer

The salaries of these two clerks are indirect costs because they are not directly related to the production of a specific product. Rather, they are associated with the general accounting and administration of the company as a whole.

The Gray Company Has a Staff of Five Clerks in Its