Question

Identify which of the following is NOT a direct cost in a cotton textile unit.

Options

• Rent of the factory where production is being carried out.

• Expense incurred on advertisement to promote the sale of the finished product.

• Colours used for dyeing the cotton fabric.

• Wages paid to the operators of sewing and spinning machines.

Answer 1

Expense incurred on advertisement to promote the sale of the finished product.

Explanation:

In manufacturing, direct costs refer to expenses related to the product itself, such as raw materials and labour.