A direct cost is a cost that is:
A) Identifiable as controllable.
B) Recorded as part of manufacturing overhead.
C) Fixed with respect to the volume of activity.
D) Traceable to a cost object.
E) Sunk with respect to a cost object.

Question

Quizplus · Accepted Answer

Direct costs are directly traceable to a cost object, such as a product, service, or department. Examples of direct costs include direct materials, direct labor, and direct expenses. They are considered controllable costs because they can be directly assigned to specific cost objects for the purpose of cost analysis and decision making.

A Direct Cost Is a Cost That Is