Classifying a cost as ______ is easier if a company's facility (or some part of it)is used exclusively for a specific cost object,such as a specific product or a particular customer.
A)direct
B)indirect
C)variable
D)fixed

Question

Quizplus · Accepted Answer

When a facility or a part of it is used exclusively for a specific cost object, the costs incurred can be directly traced to that cost object. These costs are called direct costs. The other types of costs (indirect, variable, fixed) may not be as easily ascertainable as they may be allocated to multiple cost objects or may vary with changes in activity levels. Therefore, direct costs are the best choice for classifying costs when the facility or a part of it is used exclusively for a specific cost object.

Classifying a Cost as ______ Is Easier If a Company's