CIPS Exam L4M2 Topic 4 Question 52 Discussion

Actual exam question for CIPS's L4M2 exam

Question #: 52
Topic #: 4

A garment manufacturer supplies global retailers with t-shirts, shirts, and linen trousers. Because of currency fluctuations, the manufacturer is aware that they must control their direct costs in order to ensure profits. Which of the following is a direct cost for the garment manufacturer?

AFacilities rent

BCotton fabric

CUtilities cost

DOffice staff payroll

Show Suggested Answer

Suggested Answer: B

Cotton fabric is a direct cost because it is directly attributable to the production of the garments. Costs like rent, utilities, and payroll are indirect costs associated with running the business. Reference: CIPS Level 4, Cost Categorization in Procurement.

by Jesse at Jan 12, 2025, 05:29 PM

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Glenn

3 days ago

I'm going with B. Cotton fabric. It's the core material used in the production of the garments, so it has to be a direct cost.

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Aracelis

7 days ago

Haha, office staff payroll? That's definitely an indirect cost. I mean, unless the office staff are sewing the shirts themselves, it's not a direct cost.

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Starr

8 days ago

I agree with Tamesha. The question is specifically asking about direct costs, and cotton fabric is a clear direct cost for a garment manufacturer.

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Tamesha

14 days ago

Definitely B. Cotton fabric is a direct cost in the manufacturing of garments. It's the raw material used to make the t-shirts, shirts, and linen trousers.

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Anthony

6 days ago

A: I think the direct cost for the garment manufacturer is cotton fabric.

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