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When considering a new supply source for a product, a procurement professional will review the suppliers' quotations before a supplier negotiation. Which of the following is a direct cost associated with the product within a potential supplier's quotation?
Suggested Answer: A
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Direct costs are those costs that can be directly attributed to the production of specific goods or services. They typically include raw materials and labor directly involved in production. Metal used in the product is a raw material that becomes part of the final product, making it a direct cost.
2 comments · newest first
BE
Bev
2 days ago
I'm not entirely sure, but I remember something about indirect costs like insurance and rent not being considered direct costs.
SA
Sarah
7 days ago
I think the direct cost would be the metal used in the product, since it's a raw material directly tied to production.