Week 2 Discussion Research 2 - If these are options that...

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I agree with Reynaldo, I am a bit confused myself. According to the Federal Aviation Administration’s there are apparently there are different ways that indirect material costs can be reported. They can be counted as either overhead or as a part of a completely separate section called material overhead. So, I guess that means either way indirect materials are considered overhead, it is just a matter of where the company will count those numbers. As far as your second point concerning extra amenities that the customer chooses, I agree with LaShonda.
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Unformatted text preview: If these are options that Toll Brother’s Offers as part of the customizations then I would assume they make room for those in their direct costs especially since it is directly included in the products they have available to their customers. From what I understand from the definitions I have read, what make a cost indirect is not being able to specifically trace the cost to the product. These amenities are in fact part of the product and so I would think they would be considered direct. Source: http://fast.faa.gov/pricing/98-30C10.htm...
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