Variable costs are also called indirect costs because they cannot be applied directly,without ambiguity,to each unit that is processed.

Question

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Variable costs are actually called direct costs because they vary with the level of production or sales volume. It is the fixed costs that are referred to as indirect costs because they do not vary with changes in production or sales volume and are usually allocated or apportioned among the different cost centers or products in a company.

Variable Costs Are Also Called Indirect Costs Because They Cannot