An example of a fixed cost that would be considered a direct cost is: Multiple Choice the rental cost of a warehouse to store finished goods when the cost object is the Purchasing Department. Board of Directors' fees when the cost object is the Marketing Department. a production supervisor's salary when the cost objective is the Production Department. a cost accountant's salary when the cost object is a unit of product.

Varto company has 9,400 units of its sole product in inventory that it produced last year at a cost of $23 each. this year’s model is superior to last year’s, and the 9,400 units cannot be sold at last year’s regular selling price of $42 each. varto has two alternatives for these items: (1) they can be sold to a wholesaler for $8 each, or (2) they can be reworked at a cost of $251,100 and then sold for $34 each. prepare an analysis to determine whether varto should sell the products as is or rework them and then sell them.