Question

Give one word or term or phrase for each of the following statements.

State the group in which carriage outwards and wages are included.

Answer 1

State the group in which carriage inwards (see note) and wages are included- Direct Expenses

Explanation:
Both carriage inwards and wages are regarded as ‘direct expenses’. Basically, these expenses are directly related to the production of goods and services. Carriage (or carriage inwards) is incurred for transporting raw material and semi-finished goods into the factory to be used in the production process. Likewise, wages are paid to the labourers and the blue collar workers, who are employed in the factory. Thus, as both the aforementioned expenses are related to manufacturing of goods, so they are grouped under direct expenses.

Note: There is a misprint in the question, as it has to be carriage inwards instead of carriage outwards (which is an indirect expense). If it would have been carriage outwards, then both the expenses (i.e. carriage outwards and wages) could not be included under one expense head.