Direct costs plus indirect costs equal total costs.

Name: Direct costs plus indirect costs equal total costs.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is the basic formula used in cost accounting. Direct costs are costs that can be easily traced back to a specific product or service, while indirect costs cannot be easily traced back and are often shared by different products or services. When these two costs are added together, it equals the total cost of producing a product or service.

Direct Costs Plus Indirect Costs Equal Total Costs