Which of the following are most likely to be direct costs of a steel manufacturer? Select THREE that apply.

Which of the following are most likely to be direct costs of a steel manufacturer? Select THREE that apply.
A . Cleaning services
B . Coal
C . Seniormanagement salary
D . Insurance for production lines
E . Scrap metal
F . Hourly production wages

View Answer

Answer: B,E,F

Explanation:

Direct costs are those costs of a product/service directly attributable/traceable to its production.

Examples of direct costs including the following:

Materials and services bought-in: In steel manufacturer, raw materials are iron ores, scrap metal, coals, etc

Labour or wages: money paid to staff for the work involved in producing the product. Other expenses: other charges incurred that can be specifically attributed to a particular product, batch or service