Julie works in the production department. Julie's wages are an example of ______ expenses for the production department.Multiple choice question.directindirect
Question
Julie works in the production department.
Julie’s wages are an example of ______ expenses for the production department.
- Multiple choice question.
- direct
- indirect
Solution
Answer Explanation
In the context of production and accounting, expenses can be classified as either direct or indirect.
-
Direct Expenses: These are costs that can be directly attributed to the production of goods or services. They typically include costs such as raw materials, direct labor costs (like wages of workers directly involved in production), and other expenses that can be traced directly to the production process.
-
Indirect Expenses: These expenses cannot be traced directly to a specific product or service. Instead, they are costs that are incurred to support the overall production process but are not directly linked to a specific product. Examples include utilities, rent, and salaries of supervisors and maintenance staff.
Since Julie's wages are directly associated with the production process, they would fall under direct expenses.
Final Answer:
Julie’s wages are an example of direct expenses for the production department.
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