Short Answer

Categorizing Business Expenses

A car manufacturer is analyzing its expenses. From the following list, identify ONE expense that is a direct production cost and ONE expense that is NOT a direct production cost. For each of your choices, provide a brief justification based on its relationship to the manufacturing process.

Expense List:

  • Salary for the company's CEO
  • Rubber purchased for tires
  • Cost of a national TV advertising campaign
  • Wages for factory assembly line workers

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Updated 2025-08-13

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