Classifying a cost as either direct or indirect depends upon
A)whether an expenditure is unavoidable because it cannot be changed regardless of any action taken.
B)whether the cost is expensed in the period in which it is incurred.
C)the behavior of the cost in response to volume changes.
D)the cost object to which the cost is being relateD.This is the definition for classifying a cost as either direct or indirect.

Question

Quizplus · Accepted Answer

The classification of a cost as direct or indirect depends upon the cost object to which the cost is being related. Direct costs can be easily traced to a specific cost object while indirect costs cannot be easily traced and are allocated to cost objects based on a reasonable and consistent method. Therefore, the best choice is D.

Classifying a Cost as Either Direct or Indirect Depends Upon