Mulholland Company manufactures various wooden furniture products. If the cost object is a product, a chair, what costs would be considered direct?
A)manufacturing supervisor's salary
B)depreciation on the factory building
C)salary of the worker that glues the legs to the seat of the chair
D)insurance on the factory

Question

Quizplus · Accepted Answer

The direct costs of manufacturing a chair would include the salary of the worker who glues the legs to the seat of the chair, as this is a direct labor cost that can be clearly traced to the production of the product. The manufacturing supervisor's salary (A) and insurance on the factory (D) would be considered indirect costs, as they cannot be specifically traced to the production of a single chair. Depreciation on the factory building (B) would also be considered an indirect cost, as it is a cost associated with the production facility as a whole, rather than a single product.

Mulholland Company Manufactures Various Wooden Furniture Products