Direct costs are sometimes referred to as prime costs, and indirect costs as overhead costs.

Question

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This is a correct statement. Direct costs are costs that can be specifically attributed to a particular product, service, or project, while indirect costs are costs that cannot be specifically assigned to a particular activity or product. Direct costs are sometimes called prime costs because they are necessary to produce the final product, while indirect costs are often referred to as overhead costs because they are necessary to keep the business operating but are not directly related to production.

Direct Costs Are Sometimes Referred to as Prime Costs, and Indirect