What are the total direct costs for the month for the purpose of calculating the cost of running the business for a month?
Understand the Problem
The question is asking for the total direct costs incurred by Lanning Ltd for the month, based on the provided expenses, which include depreciation, wages, fertiliser, rent, and repairs. We will sum these costs to find the total for running the business.
Answer
The total direct costs for the month are £5,200.
Answer for screen readers
The total direct costs for the month are £5,200.
Steps to Solve
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List the Direct Costs Identify all direct costs incurred by Lanning Ltd during the month:
- Depreciation: £1,200
- Wages of gardeners: £1,800
- Wages of foreman: £700
- Fertiliser: £400
- Rent of office and storage sheds: £1,000
- Repairs to lawn mowers: £100
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Sum the Costs Add all the direct costs together to find the total: $$ \text{Total Costs} = £1,200 + £1,800 + £700 + £400 + £1,000 + £100 $$
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Calculate the Total Perform the arithmetic:
- First, add the first two costs: $$ £1,200 + £1,800 = £3,000 $$
- Next, add the third cost: $$ £3,000 + £700 = £3,700 $$
- Then, add the fourth cost: $$ £3,700 + £400 = £4,100 $$
- Next, add the fifth cost: $$ £4,100 + £1,000 = £5,100 $$
- Finally, add the last cost: $$ £5,100 + £100 = £5,200 $$
The total direct costs for the month are £5,200.
More Information
Total direct costs are essential for determining the operational expenses of a business. Knowing the total helps in budgeting and financial planning.
Tips
- Forgetting to include all costs: Make sure every listed item is accounted for.
- Incorrect arithmetic: Double-check calculations to avoid small mistakes that can lead to wrong totals.
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