FFA Floriculture Practice Test

In financial planning, the costs of plant materials are categorized as:

1. Indirect costs

2. Fixed costs

3. Direct costs

4. Variable costs

The correct answer is: Direct costs

In financial planning, the costs of plant materials are categorized as direct costs because these expenses can be directly attributed to the production of floral arrangements or the maintenance of a plant nursery. Direct costs include the purchase price of the plants, seeds, soil, fertilizers, and any other materials that are essential for growing and maintaining the plants. Since these costs are necessary for the production process, they play a clear role in determining the overall profitability of a floriculture business. Indirect costs, on the other hand, are not directly tied to the production of plant materials; they encompass expenses like utilities, rent, and administrative salaries that support the business but do not vary with production levels. Fixed costs remain constant regardless of the amount of goods produced, such as lease payments for a greenhouse, while variable costs change in proportion to the production volume, like labor or shipping. Therefore, categorizing plant material costs as direct costs accurately reflects their role in the production process.