Whether a cost is treated as direct or indirect depends on whether tracing the cost is both possible and feasible.

Question

Quizplus · Accepted Answer

Tracing a cost means being able to directly link it to a particular product, department, or activity. Feasibility refers to the cost and effort associated with tracing the cost. If tracing is possible and feasible, the cost is treated as direct. If tracing is not possible or not feasible, the cost is treated as indirect.

Whether a Cost Is Treated as Direct or Indirect Depends