Question

exercise 14-2 (algo) classifying direct and indirect costs lo c2
listed here are product costs for production of soccer balls. classify each cost as either direct or indirect.

product cost	direct or indirect
2. factory utilities
3. factory supervisor salary
4. ink for labeling soccer balls
5. leather covers for soccer balls
6. annual flat fee paid for factory security
7. coolants for machinery
8. wages of product assembly workers
9. rubber bladder interior for balls
10. wages of factory machine operators

Explanation:

• Direct costs are traceable to soccer balls (materials/ labor for production). Indirect costs support production but aren’t traceable to individual balls.

1. Maintenance workers support factory operations (indirect).
2. Utilities power the factory (indirect).
3. Supervisor manages production (indirect).
4. Ink labels specific soccer balls (direct).
5. Leather covers are core materials (direct).
6. Security fee protects the factory (indirect).
7. Coolants maintain machinery (indirect).
8. Assembly workers make soccer balls (direct).
9. Rubber bladder is a core part (direct).
10. Machine operators produce balls (direct).

Answer:

1. Indirect
2. Indirect
3. Indirect
4. Direct
5. Direct
6. Indirect
7. Indirect
8. Direct
9. Direct
10. Direct