Direct costs trace to specific products

Steps:

• Recall direct costs are traceable to individual units, like materials and labor used in production.
• Examine each option for traceability to specific products.
• Classify carriage inwards as part of direct material costs.
• Confirm indirect costs include factory overheads not tied to specific units.

Why A is correct:

• Direct material costs include carriage inwards, as they are directly attributable to acquiring production materials per cost accounting definitions.

Why the others are wrong:

• B: Cleaning materials are indirect factory overheads, benefiting overall operations.
• C: Factory rent is indirect, allocated across all production.
• D: Factory manager wages are indirect supervisory costs, not tied to specific units.

Final answer: A