Which of the following is the best description of direct cost?
A.
Direct costs are only variable raw materials that constitute a product
B.
Direct costs include raw materials, labour and overheads
C.
Direct costs include only raw materials and labour of making the final product
D.
Direct costs include raw materials, labour and other expenses attributable to the final product
The Answer Is:
D
This question includes an explanation.
Explanation:
Direct costs are those costs of a product/service directly attributable/traceable to its production, for example, the costs of labour and materials directly used to produce the goods/services which the organisation sells.
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