Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 7

Are all direct costs variable? Explain.

Step 1 of 3

A manufacturer incurs several costs during the production process. These costs are bifurcated into direct and indirect cost.

Direct Cost:

Direct Costs are directly traceable to the product. Hence, it can be said that these expenses are incurred exclusively for the product and will not be incurred in case production does not happen.