Commercial Applications
Wages paid to a labour who was engaged in the production activities can be termed as ……………
- Direct cost
- Indirect cost
- Sunk cost
- Implicit cost
Cost
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Answer
Direct cost
Reason — Wages paid to labour directly engaged in the production of a particular product (e.g., a machine operator or carpenter) are direct labour cost, which is a component of direct cost. Such wages can be wholly and directly identified with the specific product being made. Sunk costs are past costs that cannot be recovered, and implicit costs are notional costs (like opportunity cost) — neither describes production wages.
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Related Questions
Which definition best describes indirect costs?
- Indirect costs are those costs which are not controlled directly by a manager.
- Indirect costs are those costs which cannot be directly associated with a product or service.
- Indirect costs are always fixed.
- Indirect costs are always manufacturing overhead cost.
To control costs, it is essential to keep control on:
- Prime cost
- Overheads
- Indirect materials and tools cost
- All of these
Which of the following best describes a fixed cost?
- A cost that remains at the same level up to a particular level of output.
- The cost changes with levels of output.
- A cost that remains at the same level when output increases.
- None of these
Which of the following is best suited meaning of overhead?
- Overhead is the cost incurred in the course of buying a product, providing a service or running a department, but which cannot be traced directly and in full to the product, service or department.
- Overhead is the cost incurred in the course of making a product, providing a service or running a department, but which cannot be traced directly and in full to the product, service or department.
- Overhead is the cost incurred in the course of selling a product, providing a service or running a department, but which cannot be traced directly and in full to the product, service or department.
- Overhead is the cost incurred in the course of advertising a product, providing a service or running a department, but which cannot be traced directly and in full to the product, service or department.