The salaries of employees who spend all their time working in one department are direct expenses.
Direct expenses are the expenses which are incurred that varies directly with changes in the volume of a cost object.
A cost object is any item for which expenses are measured, such as products, product lines, services, employees, sales regions and customers.
There are several examples of direct expenses given below:
The materials which are used in constructing a product for sale.
The cost of the freight required to transport goods to and from a manufacturing facility
The labor which is incurred to produce hours billable to a client.
Labor and payroll taxes which are paid based on the number of units produced
Production materials which are consumed during the manufacture of goods.
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