Asked by Becky Tseng on May 02, 2024
Verified
Direct costs:
A) are incurred to benefit a particular accounting period.
B) are incurred due to a specific decision.
C) can be easily traced to a particular cost object.
D) are the variable costs of producing a product.
Cost Object
Any item for which a separate measurement of costs is desired, including products, services, projects, or customers.
Direct Costs
Expenses directly associated with the production of goods or services, such as raw materials and labor.
Variable Costs
Costs that vary directly with the level of production or volume of output, including materials and labor directly involved in a company's manufacturing process.
- Recognize how direct and indirect costs are traced and allocated to cost objects.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
C
Explanation :
Direct costs can be easily traced to a particular cost object, such as a product or service. Option A is incorrect because direct costs may be incurred over multiple accounting periods. Option B is incorrect because direct costs can result from routine operations as well as specific decisions. Option D is incorrect because direct costs include both variable and fixed costs.
Learning Objectives
- Recognize how direct and indirect costs are traced and allocated to cost objects.