Which one of the following items is a direct cost?
A) Customer-service costs of a multiproduct firm; Product A is the cost object.
B) Printing costs incurred for payroll check processing; payroll check processing is the cost object.
C) The salary of a maintenance supervisor in a multiproduct manufacturing plant; Product B is the cost object.
D) Utility costs of the administrative offices; the accounting department is the cost object.

Question

Quizplus · Accepted Answer

Direct costs are costs that can be specifically and easily traced to a cost object such as a product, department, or project. In this case, printing costs incurred for payroll check processing are a direct cost because they can be easily traced to the cost object, which is payroll check processing.

Which One of the Following Items Is a Direct Cost