Asked by Carmen Ortega on May 31, 2024
Verified
Indirect costs can be specifically traced to a cost object.
Indirect Costs
Expenses not directly tied to a specific product, service, project, or activity, typically including utilities, rent, and administrative salaries.
Cost Object
Any item for which costs are measured and assigned, including products, services, projects, activities, or customers.
- Explain the variance between direct and indirect costs pertaining to a cost object.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
False
Explanation :
Indirect costs cannot be specifically traced to a cost object as they are not directly related to the production of a particular product or service. Examples of indirect costs include rent, utilities, and administrative salaries, which are incurred for the overall operation of the business and cannot be easily allocated to a specific product or service.
Learning Objectives
- Explain the variance between direct and indirect costs pertaining to a cost object.
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