Which statement is TRUE?
A)All fixed costs are direct costs.
B)A direct cost of one cost object can be an indirect cost of another cost object.
C)A direct cost of one cost object cannot be an indirect cost of another cost object.
D)All variable costs are direct costs.

Question

Quizplus · Accepted Answer

This statement is true as a cost item can be both direct and indirect. For example, the salary of a supervisor is a direct cost of the department they supervise, but it is an indirect cost of the company's overall operations. Option A and D are false as not all fixed or variable costs are direct costs. Option C is also false as a cost item can be both direct and indirect.

Which Statement Is TRUE