Which of the following does NOT affect the direct/indirect classification of a cost?
A)the level of budgeted profit for the next year
B)available technology to gather information about the cost
C)the design of the operation
D)the materiality of the cost in question

Question

Quizplus · Accepted Answer

The level of budgeted profit for the next year does not affect the direct/indirect classification of a cost. The classification is based on whether the cost can be directly traced to a product or service or if it is an overhead cost associated with the production process. The level of budgeted profit may impact the decision to incur the cost or the allocation of the cost, but it does not affect the classification of the cost.

Which of the Following Does NOT Affect the Direct/indirect Classification