Which statement is TRUE?
A)All fixed costs are indirect costs.
B)All direct costs are variable costs.
C)All variable costs are direct costs.
D)Because of a cost-benefit trade-off,some direct costs may be treated as indirect costs.

Question

Quizplus · Accepted Answer

Due to the cost-benefit trade-off, some direct costs may be treated as indirect costs. For example, if it is too costly or time-consuming to track a direct cost for each individual product or service, it may be allocated as an indirect cost instead. Therefore, not all direct costs are necessarily variable costs and not all fixed costs are necessarily indirect costs.

Which Statement Is TRUE