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.

Question

Quizplus · Accepted Answer

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.

Direct Costs