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CIPS L4M2 Exam - Topic 4 Question 52 Discussion

Actual exam question for CIPS's L4M2 exam
Question #: 52
Topic #: 4
[All L4M2 Questions]

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?

Show Suggested Answer Hide 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
3 months ago
Totally agree, cotton fabric is essential for production.
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Shawna
3 months ago
Surprised office staff payroll isn't a direct cost!
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Rosenda
3 months ago
Facilities rent? Not really a direct cost.
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Starr
4 months ago
I think utilities cost should count too.
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Flo
4 months ago
Cotton fabric is definitely a direct cost!
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Phung
4 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
4 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
4 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
5 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
5 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
5 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
5 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
5 months ago
This seems like a straightforward question about direct costs. I'll think through the options carefully.
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Francesco
1 year ago
I'm not sure about the others, but I think cotton fabric makes sense as a direct cost.
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Alona
1 year 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
1 year ago
B: Agreed, it's the most obvious choice.
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Rosendo
1 year ago
A: Definitely B. Cotton fabric is a direct cost for a garment manufacturer.
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Susy
1 year ago
I agree with Cheryll. Cotton fabric is definitely a direct cost for the manufacturer.
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Cheryll
1 year ago
I think cotton fabric is a direct cost because it's directly used in making the garments.
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Glenn
1 year 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
1 year ago
A: Exactly, it's a crucial component in their production process.
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Shawnee
1 year ago
B: Yeah, without the cotton fabric, they wouldn't be able to produce any garments.
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Golda
1 year ago
A: I agree, B) Cotton fabric is definitely a direct cost for the manufacturer.
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Aracelis
1 year 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
1 year 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
1 year ago
D: So, controlling the cost of cotton fabric is crucial for their profits.
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Rosalyn
1 year ago
C: It makes sense, since the manufacturer needs the fabric to make the garments.
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Lovetta
1 year ago
B: Definitely, cotton fabric is a direct cost for a garment manufacturer.
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Deja
1 year ago
A: B) Cotton fabric
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Tamesha
1 year 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
1 year ago
A: So, facilities rent, utilities cost, and office staff payroll are not direct costs?
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Sunshine
1 year ago
B: I agree, cotton fabric is the raw material used to make the garments.
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Anthony
1 year ago
A: I think the direct cost for the garment manufacturer is cotton fabric.
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