Direct costs and indirect costs can be easily traced directly to a cost object.

Name: Direct costs and indirect costs can be easily traced directly to a cost object.
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Question

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Direct costs can be easily traced directly to a cost object, such as a product or a department. In contrast, indirect costs, such as overhead, are not directly traceable to a specific cost object and are allocated based on a predetermined rate or method.

Direct Costs and Indirect Costs Can Be Easily Traced Directly