Part 2: For the same company and scenario described in Part 1 above, identify whether each of the following expense items for this company would be categorized as a DIRECT COST or an INDIRECT COST by placing an X in the appropriate box for each item. Note that each type of expense is either a direct cost or an indirect cost, but not both. The first item has already been completed for you.

Expense Item	DIRECT COST	INDIRECT COST
Factory insurance		X
Bakers wages
Eggs used for baking
Depreciation expense on bake ovens
Factory lease
Cleaning materials for bake ovens
Factory utilities
Factory supervisors salaries
Lubricant for factory equipment
Flour used in baking bread