Which of the following statements about the direct/indirect cost classification is NOT true?
A)Indirect costs are always traced.
B)Indirect costs are always allocated.
C)The design of operations affects the direct/indirect classification.
D)The direct/indirect classification depends on the choice of cost object.

Question

Quizplus · Accepted Answer

Indirect costs are not always traced, as they cannot be directly linked to a specific cost object. Instead, they are allocated based on an allocation basis or cost driver. Direct costs, on the other hand, can be traced directly to a cost object.

Which of the Following Statements About the Direct/indirect Cost Classification