Chapter 18, Problem 8DQ

To determine

Concept Introduction:

Direct and Indirect costs:

Direct costs: Direct costs can be defined as the cost which can be directly associated or linked with each unit of product. For example, 1 lbs. raw material is used to produce 1 furnished unit and 1 labor hour is required to produce 1 furnished unit.

Indirect costs: Indirect costs can be defined as the cost which cannot be directly associated or linked with each unit of product. For example, supervisor’s salary for the month or depreciation of the equipment etc.

To prepare:

A list of Samsung’s −

1. Three direct costs
2. Three indirect costs