Which of the followings statements is correct regarding direct and indirect costs?
A) Direct costs cannot easily be traced to a cost object, whereas indirect costs can be easily traced to a cost object.
B) Direct costs can be easily traced to a cost object, whereas indirect costs cannot be easily traced to a cost object.
C) Direct costs are always relevant to a particular cost decision, whereas indirect costs are never relevant to a cost decision.
D) Direct costs are never relevant to a particular cost decision, whereas indirect costs are always relevant to a cost decision.

Question

Quizplus · Accepted Answer

Direct costs are easily traced to a cost object, while indirect costs cannot be easily traced to a cost object. Direct costs are considered to be more variable and traceable, while indirect costs are relatively fixed and difficult to allocate to a particular cost object. Direct costs are always relevant to cost decision-making, while indirect costs may or may not be relevant depending on the specific decision being made.

Which of the Followings Statements Is Correct Regarding Direct and Indirect