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Costs can be categorised in many ways. One way to categorise the costs incurred by...

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Accounting

Costs can be categorised in many ways. One way to categorise the costs incurred by a company is direct and indirect costs. Pizzeria Bella Napoli makes frozen pizzas. The accountant of Pizzeria Bella Napoli has identified the following costs:

i) Cost of the maintenance of the pizza making equipment

ii) Cost of the labour needed to make the crust

iii) Cost of the sauce used in the pizza

iv) Cost of the cheeses used in the pizza

v) Cost of the freezers to store the finished pizza

Which ones of the previous costs will be treated as indirect costs?

Select one:

A. i) and iii)

B. i) and v)

C. ii) and v) only

D. i) and ii)

E. iii) and iv) only

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