Mydas Ltd operates a large factory which manufactures three types of motor vehicles, including family cars, sports cars and motorcycles. If the cost object is a motorcycle, which of the following is a direct cost?
A) The costs of wheels on the motorcycle
B) The salary of the factory general manager
C) The salary of the factory quality inspector
D) The windscreen wipers on a family car

Question

Quizplus · Accepted Answer

The costs of wheels on the motorcycle are directly related to the production of the motorcycle and can be easily traced to this specific cost object. The salary of the factory general manager and quality inspector are not directly related to the production of a specific vehicle and are considered indirect costs. The windscreen wipers on a family car are also not directly related to the production of a motorcycle and are therefore an indirect cost.

Mydas Ltd Operates a Large Factory Which Manufactures Three Types