Question

Which one of the following is an example of a direct cost in the manufacturing of pista burfi chocolate?

• A. Salary of Accountant
• B. Pistachios
• C. Electricity
• D. Depreciation

Hint:

Raw materials used in production = always direct costs.

Answer 1

The Correct Option is B

Direct costs are those costs that can be directly traced to the production of a specific product.
In the case of manufacturing pista burfi chocolate, pistachios are a direct raw material used in the product.
Costs like the salary of an accountant, electricity, or depreciation are indirect costs — they help run the factory but cannot be traced directly to a single unit of product.
Therefore, Pistachios are a direct cost in this context.
Identifying direct costs correctly is important for accurate product costing and profit measurement.