Which of the following statements is true?
A) Indirect costs can easily be traced to a cost object; direct costs cannot be easily traced to a cost object.
B) Both direct and indirect costs can easily be traced to a cost object.
C) Neither direct nor indirect costs are easily traced to a cost object.
D) Direct costs can be traced easily to a cost object, but indirect costs cannot be easily traced to a cost object.

Question

Quizplus · Accepted Answer

Direct costs can be easily traced to a cost object because they are clearly identifiable and quantifiable. Indirect costs, on the other hand, do not have a clear link to a specific cost object, and therefore, they require allocation or estimation methods to determine their cost.

Which of the Following Statements Is True