Which of the following statements concerning direct and indirect costs is NOT true?
A) Whether a particular cost is classified as direct or indirect does not depend on the cost object.
B) A direct cost is one that can be easily traced to the particular cost object.
C) The factory manager's salary would be classified as an indirect cost of producing one unit of product.
D) A particular cost may be direct or indirect, depending on the cost object.

Question

Quizplus · Accepted Answer

Whether a cost is classified as direct or indirect depends on the cost object. For example, the salary of a worker on a production line can be a direct cost of producing a particular product, but an indirect cost when considering the cost of the entire factory.

Which of the Following Statements Concerning Direct and Indirect Costs