Cost Accounting BasicsMCQQuestion 5818 of 6
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Which of the following costs is considered a direct cost?

Options

ASalaries of production supervisors
BRent of the factory building
CCost of raw materials
DInsurance on factory equipment
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Correct Answer

✅ Option C — Cost of raw materials

All Options:

  • ASalaries of production supervisors
  • BRent of the factory building
  • CCost of raw materials ✓
  • DInsurance on factory equipment

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Detailed Solution & Explanation

Direct costs are expenses that can be directly traced to the production of a specific product or service. Examples include the cost of raw materials, direct labor, and direct overhead. In this case, the cost of raw materials is a direct cost because it can be directly associated with the production of a specific product.
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