FFA Floriculture Practice Test

Which of the following is considered a direct cost in a floral shop?

1. Employee wages

2. Rent for the shop

3. Cut flower in the cooler

4. Advertising expenses

The correct answer is: Cut flower in the cooler

In the context of a floral shop, a direct cost refers to an expense that can be directly attributed to the production of goods or services provided by the shop. Cut flowers in the cooler fall into this category because they are directly used to create the floral arrangements that the shop sells. Their cost, along with any other materials specifically needed to produce the final product, is a direct cost, as it varies according to the volume of sales and production. Employee wages can sometimes be considered direct costs if they are specifically tied to the production of floral arrangements; however, they might also involve indirect costs if they encompass broader operational duties. Rent is more of an overhead or fixed cost, as it does not change with the production volume. Advertising expenses are also categorized as indirect costs since they support the overall marketing of the business rather than contributing directly to the sale of a specific product. Thus, cut flowers in the cooler represent a tangible cost associated with the immediate production process in a floral shop.