Direct costs trace to specific products in manufacturing

Steps:

• Recall direct costs are expenses directly attributable to producing a specific product, like materials or labor.
• Evaluate each option against this definition for traceability to production.
• Eliminate indirect costs, which support overall operations but aren't product-specific.
• Identify the option that varies directly with production volume.

Why D is correct:

• Production royalties are payments made per unit produced, directly traceable to specific products per cost accounting definitions.

Why the others are wrong:

• A: Carriage outwards is an indirect selling expense, not tied to production.
• B: Depreciation of delivery vehicle is an indirect distribution overhead, unrelated to manufacturing.
• C: Factory supervisor's salary is indirect labor overhead, benefiting multiple products.

Final answer: D