6. Which of the following costs is most likely to be directly traceable to a spe
ID: 2553800 • Letter: 6
Question
6. Which of the following costs is most likely to be directly traceable to a specific department in a retail clothing store? A. The cost of heating and air conditioning. B. The cost of supplies. C. The cost of the department manager's salary. D. Rent on the store building. 7. A chair manufacturer makes custom chairs using hand tools, wood, glue, and varnish. Which of the following statements is true? A. he costs of wood and glue would be treated as direct costs. B. Wood, glue, and varnish would all be direct materials. C. Wood would be accounted for as a direct cost, and glue and varnish as indirect costs. D. The concepts of direct and indirect costs are not applicable here.Explanation / Answer
Answer
Correct answer is Option – C : The Cost of the department manager’s salary is most likely to be directly traceable to a specific department.
This is because each department has its own manager and each managers salary can be traced to that department.
Correct answer is Option – B: Wood, Glue and varnish would all be direct materials.
Direct materials are those materials that are essentially required to produce a product and those become part of the product. While making chairs, the wood, glue and varnish is required and hence they all are direct materials as they are directly related to production of chairs.
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