A cost is classified as a direct or indirect cost based on the applicable cost object.

Name: A cost is classified as a direct or indirect cost based on the applicable cost object.
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The classification of a cost as direct or indirect depends on the cost object to which it is being traced. Direct costs are those that can be easily traced to a specific cost object, while indirect costs are those that cannot be directly traced and require allocation or apportionment to a cost object.

A Cost Is Classified as a Direct or Indirect Cost