Why should indirect expenses be added to the cost of an art product?
Answer and explanation
Correct answer: Because expenses such as workspace rent, electricity, transport and packaging are part of the product’s actual total cost
Indirect expenses such as workspace rent, electricity, transport and packaging may not be directly visible in one item, but they are genuinely incurred in making and selling it. Adding them gives the total cost and helps fix a fair selling price, preventing losses caused by underpricing. Considering only raw-material cost is incorrect because it leaves the product cost incomplete. Exam tip: Include direct material, labour and indirect expenses when calculating total cost.
Frequently asked questions
What is the correct answer to this question?
Because expenses such as workspace rent, electricity, transport and packaging are part of the product’s actual total cost
Why is this the correct answer?
Indirect expenses such as workspace rent, electricity, transport and packaging may not be directly visible in one item, but they are genuinely incurred in making and selling it. Adding them gives the total cost and helps fix a fair selling price, preventing losses caused by underpricing. Considering only raw-material cost is incorrect because it leaves the product cost incomplete. Exam tip: Include direct material, labour and indirect expenses when calculating total cost.
Which subject and chapter does this question cover?
This is a Class 11 Home Science question. Chapter: Work, Livelihood and Career. Topic: Traditional occupations in India - Visual arts.
