basic economics please help asap

Question

Steve buys a new coat from Don's clothing store. Don buys coats from Mary's factory, and Mary buys her material from Sean's mill. The cost of Steve's coat will go up if the workers in Sean's mill get raises. What economic term does this example describe?

Answer 1

Indirect cost.

 

See this link:  http://accountingexplained.com/managerial/costs/direct-and-indirect-costs

 

The workers' wages are only a direct cost in relation to the material produced at Sean's mill. To Mary, Don, and Steve the mill workers' wages are an indirect cost.