CIPS L4M2 Exam - Topic 4 Question 52 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 52
Topic #: 4

A garment manufacturer supplies global retailers with t-shirts, shirts, and linen trousers. Because of currency fluctuations, the manufacturer is aware that they must control their direct costs in order to ensure profits. Which of the following is a direct cost for the garment manufacturer?

AFacilities rent

BCotton fabric

CUtilities cost

DOffice staff payroll

Show Suggested Answer

Suggested Answer: B

Cotton fabric is a direct cost because it is directly attributable to the production of the garments. Costs like rent, utilities, and payroll are indirect costs associated with running the business. Reference: CIPS Level 4, Cost Categorization in Procurement.

by Jesse at Jan 12, 2025, 05:29 PM

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Zena

9 months ago

Totally agree, cotton fabric is essential for production.

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Shawna

9 months ago

Surprised office staff payroll isn't a direct cost!

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Rosenda

10 months ago

Facilities rent? Not really a direct cost.

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Starr

10 months ago

I think utilities cost should count too.

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Flo

10 months ago

Cotton fabric is definitely a direct cost!

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Phung

10 months ago

Facilities rent seems like it could be a direct cost, but I feel like it's more of an overhead expense. I'm confused about that one.

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Mammie

11 months ago

I practiced a similar question where we had to identify direct costs, and I remember that materials like fabric are usually considered direct costs.

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Luisa

11 months ago

I'm not entirely sure, but I remember something about utilities being more of an indirect cost since they support the overall operation.

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Alaine

11 months ago

I think direct costs are those that can be directly attributed to the production of goods, so I'm leaning towards cotton fabric.

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Hannah

11 months ago

Facilities rent and utilities are overhead costs, not directly tied to production. Office staff payroll is also an indirect cost. I think the cotton fabric is the direct cost here.

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Adria

11 months ago

Okay, I've got this. The direct costs for a garment manufacturer would be the materials used to make the products, like the cotton fabric. I'll select that option.

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Denise

11 months ago

Hmm, I'm a bit unsure about this one. I need to review my notes on the difference between direct and indirect costs.

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Carissa

11 months ago

This seems like a straightforward question about direct costs. I'll think through the options carefully.

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Francesco

2 years ago

I'm not sure about the others, but I think cotton fabric makes sense as a direct cost.

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Alona

2 years ago

B. Cotton fabric. Easy peasy. I'm not even going to bother with the other options. That's the only one that makes sense for a garment manufacturer.

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Karma

2 years ago

B: Agreed, it's the most obvious choice.

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Rosendo

2 years ago

A: Definitely B. Cotton fabric is a direct cost for a garment manufacturer.

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Susy

2 years ago

I agree with Cheryll. Cotton fabric is definitely a direct cost for the manufacturer.

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Cheryll

2 years ago

I think cotton fabric is a direct cost because it's directly used in making the garments.

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Glenn

2 years ago

I'm going with B. Cotton fabric. It's the core material used in the production of the garments, so it has to be a direct cost.

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Jacqueline

2 years ago

A: Exactly, it's a crucial component in their production process.

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Shawnee

2 years ago

B: Yeah, without the cotton fabric, they wouldn't be able to produce any garments.

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Golda

2 years ago

A: I agree, B) Cotton fabric is definitely a direct cost for the manufacturer.

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Aracelis

2 years ago

Haha, office staff payroll? That's definitely an indirect cost. I mean, unless the office staff are sewing the shirts themselves, it's not a direct cost.

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Starr

2 years ago

I agree with Tamesha. The question is specifically asking about direct costs, and cotton fabric is a clear direct cost for a garment manufacturer.

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Bettye

2 years ago

D: So, controlling the cost of cotton fabric is crucial for their profits.

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Rosalyn

2 years ago

C: It makes sense, since the manufacturer needs the fabric to make the garments.

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Lovetta

2 years ago

B: Definitely, cotton fabric is a direct cost for a garment manufacturer.

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Deja

2 years ago

A: B) Cotton fabric

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Tamesha

2 years ago

Definitely B. Cotton fabric is a direct cost in the manufacturing of garments. It's the raw material used to make the t-shirts, shirts, and linen trousers.

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Dianne

2 years ago

A: So, facilities rent, utilities cost, and office staff payroll are not direct costs?

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Sunshine

2 years ago

B: I agree, cotton fabric is the raw material used to make the garments.

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Anthony

2 years ago

A: I think the direct cost for the garment manufacturer is cotton fabric.

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