Which of the following statements is true?
A) A direct cost of one cost object will always be a direct cost of another cost object.
B) Because of a cost-benefit tradeoff, some direct costs may be treated as indirect costs.
C) All fixed costs are indirect costs.
D) All direct costs are variable costs.

Question

Quizplus · Accepted Answer

Direct costs are costs that can be easily and specifically traced to a particular cost object, such as a product or service. However, there may be some direct costs that, due to a cost-benefit tradeoff, are treated as indirect costs. For example, the cost of a supervisor who oversees the production of multiple products may be considered an indirect cost rather than a direct cost of any one particular product.

Which of the Following Statements Is True