What statement is NOT true regarding the insurance paid on a factory?
A)It is a direct cost if the cost object is the factory.
B)It is an indirect cost if the cost object is the product produced.
C)It is a direct cost if the cost object is the accounting department.
D)It is an indirect cost if the cost object is the production department.

Question

Quizplus · Accepted Answer

Insurance paid on a factory is not a direct cost if the cost object is the accounting department. Direct costs are those that can be directly traced to a specific cost object or product, while indirect costs cannot be traced to a specific cost object or product. Therefore, option C is not true, as insurance on a factory cannot be a direct cost if the cost object is the accounting department.

What Statement Is NOT True Regarding the Insurance Paid on a Factory