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CMA Intermediate · Cost Accounting · Direct Expenses

Which of the following is NOT normally classified as a direct expense under CAS 10?

The works accountant's salary is not a direct expense, because it benefits all production units and cannot be traced to a specific cost object. A dedicated licence, product-specific design fees and separately metered power for one contract are traceable and therefore direct.

  1. ACost of software licence bought solely for a customer's order
  2. BFees paid for specific design work for one product
  3. CCost of power consumed, metered separately for a single contract
  4. DSalary of the works accountant who serves all production unitsCorrect

Explanation

Items traceable to a specific product, job or contract, like a dedicated licence, design fees or separately metered power, are direct expenses. The works accountant's salary supports all units and cannot be traced, so it is an overhead.

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