ECONOMICS

Detailed explanation-1: -Royalties on each unit produced would not appear as a direct cost.

Detailed explanation-2: -Factory Rent is a Direct Expense as it is related to factory, also it is a part of manufacturing expense and therefore, written on the. The expenses, incurred after manufacturing of goods are indirect expenses.

Detailed explanation-3: -Advertisement is a selling cost and not a production cost as it is not directly related to the production of the good. Its is usually classified as a sunk cost or an indirect cost. All other costs are directly related to the production of a good.

Detailed explanation-4: -In a manufacturing company, direct costs are called the cost of goods sold (COGS). In a retail or wholesale business that buys products from suppliers, direct costs are called the cost of sales (COS).