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CMA Intermediate · Cost Accounting · Direct Expenses

Which of these is NOT normally classified as a direct expense?

The salary of a factory supervisor who oversees all jobs is not a direct expense. It cannot be traced to a single job, so it is an indirect employee cost under factory overheads. Job-specific designs, expert fees and equipment hire are direct expenses.

  1. ACost of drawings and designs made specifically for a customer's job
  2. BFees paid to an outside expert engaged for a particular job
  3. CCost of tools or equipment hired for a specific job
  4. DSalary of the factory supervisor overseeing all jobsCorrect

Explanation

Design costs, expert fees and hire of equipment for a specific job are traceable to that job and so are direct expenses. A supervisor overseeing all jobs is not traceable to one job and is a factory overhead (indirect employee cost).

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