"Problem 1
Required: Identify each of the following as either a direct or indirect cost. "
Material used in production Direct
Salary of manufacturing supervisor Indirect
Wages of manufacturing worker Direct
Telephone costs Indirect
Rent Indirect
Required: GH Company is trying to decide whether to replace a current piece of machinery with a new machine. Using the below data, determine the relevant costs of the old machine and the new machine. Should GH Company purchase the new machine?