Question

Consider the production department of a manufacturer of laptop computers. Classify the cost of the factory maintenance manager's salary.

a. variable.
b. direct.
c. period.
d. fixed.

Answer 1

d. fixed.

Step-by-step explanation:

The Maintenance Managers`s work can not be directly traced during the production process and this does not meet the definition of a direct cost.

However the Maintainace Managers`s work is key in every production thus, it is an indirect manufacturing cost that in most cases is fixed.

Fixed in the sense that the salary (cost) does not vary with the level of production.