Chapter 10, Problem 10.2MBA

To determine

(a)

Concept introduction:

Direct Cost:

The cost which is directly related to the product and affects those items directly, which contributes to the revenue generation in the business is referred as direct cost.

Indirect Cost:

The cost which is not directly related to the product and does not affect those items directly, which contributes to the revenue generation in the business is referred as indirect cost. These can be fixed cost or such costs are incurred as a whole and cannot be make relation to manufacturing cost.

The reason behind increment in the cost per plaque.

To determine

(b)

Concept introduction:

Direct Cost:

The cost which is directly related to the product and affects those items directly which contributes to the revenue generation in the business is referred as direct cost.

Indirect Cost:

The cost which is not directly related to the product and does not affect those items directly which contributes to the revenue generation in the business is referred as indirect cost. These can be fixed costs or such costs are incurred as a whole and cannot be make relation to manufacturing cost.

The area of concern for HT on the basis of unit costs.