Classifying a cost as either direct or indirect depends upon
A) whether an expenditure is unavoidable because it cannot be changed regardless of any action taken.
B) whether the cost is expensed in the period in which it is incurred.
C) the behavior of the cost in response to volume changes.
D) the cost object to which the cost is being related.

Question

Quizplus · Accepted Answer

The classification of a cost as direct or indirect depends on the cost object, which is the item or activity to which the cost is being assigned. Direct costs can be directly traced to a specific cost object, while indirect costs cannot be easily traced and are allocated instead.

Classifying a Cost as Either Direct or Indirect Depends Upon