Direct and Indirect Cost

Question 1

Give an example of direct costs

Answer 1

RAW MATERIALS ( to make the product)

DIRECT LABOUR ( money for workers to make the product)

EQUIPMENT ( tools or machinery)

Question 2

Give an example of indirect costs

Answer 2

UTILITIES (water, electricity and gas)

RENT (cost of the building)

SUPPLIES

Question 3

Give an overall summary of direct and indirect costs

Answer 3

Direct costs are specific to one thing and indirect cost are specific to different things

Question 4

Give an example of the direct costs in a cake shop

Answer 4

Flower

Eggs

Milk

Icing

Question 5

Give an example of the Indirect costs in a cake shop

Answer 5

Rent

Electricity

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