A direct cost of one cost object can be an indirect cost of another cost object.

Question

Quizplus · Accepted Answer

Direct and indirect costs are classified based on the cost object they are related to. A cost object is anything for which we want to know the cost. The same cost may be direct for one cost object and indirect for another cost object. For example, the salary of a supervisor can be a direct cost for a production department but an indirect cost for a sales department.

A Direct Cost of One Cost Object Can Be an Indirect