Question

The cost of the lumber that is used to manufacture tables is best described as a:

1) fixed cost
2) variable cost
3) direct cost
4) indirect cost

Answer 1

The lumber cost in table manufacturing is a variable and direct cost, changing with production levels and directly traceable to the end product.

Step-by-step explanation:

The cost of the lumber that is used to manufacture tables is best described as a variable cost and direct cost. Variable costs change depending on the level of production, such as when you hire more workers or produce more goods, which in this case, would be equivalent to using more lumber as you manufacture more tables. Similarly, it is a direct cost because it is directly traceable to the product being manufactured - the lumber goes directly into the creation of the tables.