Some costs that possibly could be traced directly to cost objects are nonetheless classified as indirect costs because:
A) Such costs cannot be traced to objects in a cost-effective manner.
B) Such practice results in a more accurate accumulated cost for the object.
C) Generally accepted accounting principles require some costs to be treated as indirect.
D) All of these answers are correct.

Question

Quizplus · Accepted Answer

When a cost cannot be traced to an object in a cost-effective manner, it is classified as an indirect cost. The focus is on the cost-effectiveness of tracing the cost rather than on its accuracy or compliance with accounting principles.

Some Costs That Possibly Could Be Traced Directly to Cost