Asked by Ronald Blair on May 10, 2024
Verified
A direct cost is a cost that is:
A) Identifiable as controllable.
B) Traceable to the company as a whole.
C) Does not change with the volume of activity.
D) Traceable to a single cost object.
E) Traceable to multiple cost objects.
Direct Cost
Expenses that can be directly tied to the production of specific goods or services, such as raw materials and labor.
Cost Object
An item for which costs are measured and assigned, which can include products, services, projects, or customers.
Volume of Activity
A term referring to the total amount of work or operations completed in a specific period, often used in analyzing business efficiency or productivity.
- Recognize the attributes of fixed and variable expenses, as well as direct and indirect costs.
Verified Answer
VD
Vanessa DelgadoMay 10, 2024
Final Answer :
D
Explanation :
A direct cost is a cost that can be traced or allocated to a single cost object, such as a product or department. Therefore, option D, "Traceable to a single cost object," is the best choice for the definition of a direct cost.
Learning Objectives
- Recognize the attributes of fixed and variable expenses, as well as direct and indirect costs.