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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?
Suggested Answer: B
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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.
33 comments · newest first
ZE
Zena
11 months ago
Totally agree, cotton fabric is essential for production.
SH
Shawna
11 months ago
Surprised office staff payroll isn't a direct cost!
RO
Rosenda
12 months ago
Facilities rent? Not really a direct cost.
ST
Starr
12 months ago
I think utilities cost should count too.
FL
Flo
1 year ago
Cotton fabric is definitely a direct cost!
PH
Phung
1 year 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.
MA
Mammie
1 year 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.
LU
Luisa
1 year ago
I'm not entirely sure, but I remember something about utilities being more of an indirect cost since they support the overall operation.
AL
Alaine
1 year ago
I think direct costs are those that can be directly attributed to the production of goods, so I'm leaning towards cotton fabric.
HA
Hannah
1 year 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.
AD
Adria
1 year 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.
DE
Denise
1 year ago
Hmm, I'm a bit unsure about this one. I need to review my notes on the difference between direct and indirect costs.
CA
Carissa
1 year ago
This seems like a straightforward question about direct costs. I'll think through the options carefully.
FR
Francesco
2 years ago
I'm not sure about the others, but I think cotton fabric makes sense as a direct cost.
AL
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.
KA
Karma
2 years ago
B: Agreed, it's the most obvious choice.
RO
Rosendo
2 years ago
A: Definitely B. Cotton fabric is a direct cost for a garment manufacturer.
SU
Susy
2 years ago
I agree with Cheryll. Cotton fabric is definitely a direct cost for the manufacturer.
CH
Cheryll
2 years ago
I think cotton fabric is a direct cost because it's directly used in making the garments.
GL
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.
JA
Jacqueline
2 years ago
A: Exactly, it's a crucial component in their production process.
SH
Shawnee
2 years ago
B: Yeah, without the cotton fabric, they wouldn't be able to produce any garments.
GO
Golda
2 years ago
A: I agree, B) Cotton fabric is definitely a direct cost for the manufacturer.
AR
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.
ST
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.
BE
Bettye
2 years ago
D: So, controlling the cost of cotton fabric is crucial for their profits.
RO
Rosalyn
2 years ago
C: It makes sense, since the manufacturer needs the fabric to make the garments.
LO
Lovetta
2 years ago
B: Definitely, cotton fabric is a direct cost for a garment manufacturer.
DE
Deja
2 years ago
A: B) Cotton fabric
TA
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.
DI
Dianne
2 years ago
A: So, facilities rent, utilities cost, and office staff payroll are not direct costs?
SU
Sunshine
2 years ago
B: I agree, cotton fabric is the raw material used to make the garments.
AN
Anthony
2 years ago
A: I think the direct cost for the garment manufacturer is cotton fabric.