Classifying a cost as either direct or indirect depends upon ________.
A) the behavior of the cost in response to volume changes
B) whether the cost is expensed in the period in which it is incurred
C) whether the cost can be easily traced with the cost object
D) whether a cost is fixed or variable

Question

Quizplus · Accepted Answer

Direct costs can be easily traced to a specific cost object, while indirect costs cannot be easily traced or assigned to a specific cost object. The behavior, timing of expense, and variability of a cost do not determine its classification as direct or indirect.

Classifying a Cost as Either Direct or Indirect Depends Upon