Swivel Vacuums manufactures several models of vacuum cleaners. For each vacuum, they use 6 small screws to hold the bottom frame in place. The company purchases these screws in packs of 10,000 for $137.49. If the total cost of goods sold for one vacuum is $87.53, how would you classify the cost for the screws? Why?

Question

Business

Matteo Choi

6 September, 12:35

Swivel Vacuums manufactures several models of vacuum cleaners. For each vacuum, they use 6 small screws to hold the bottom frame in place. The company purchases these screws in packs of 10,000 for $137.49. If the total cost of goods sold for one vacuum is $87.53, how would you classify the cost for the screws? Why?

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Answers (1)

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Lance Bell · Answer 1

The cost of the screws would e classified as Indirect Materials

Explanation:

The indirect materials are those resources that are used to assemble direct material into finished products and can't be traced back to the product they produce.

These crews don't really have any value themselves and don't add any meaning value to the overall vacuums compared to its price.