The traceability of direct costs by businesses is made possible by the use of:
A)a tracking system to link the cost to the cost object
B)financial reports
C)cost drivers
D)all of the options are used to trace direct costs.

Question

Quizplus · Accepted Answer

Direct costs are costs that can be easily and specifically traced to a particular product, service, or project. To accurately track these costs, businesses use a tracking system that links the cost to the cost object. This can be done through the use of job costing systems, process costing systems, or activity-based costing systems. By tracking direct costs in this way, businesses can better understand how much it costs to produce a particular product or service, and can make more informed decisions about pricing and resource allocation. Financial reports and cost drivers are important tools for cost management, but they do not specifically relate to the traceability of direct costs.

The Traceability of Direct Costs by Businesses Is Made Possible