An indirect cost can be readily traced to a cost object while a direct cost is traced only to manufacturing costs.An indirect cost cannot be readily traced to a cost object.A direct cost can be traced to a specific cost object.It does not necessarily involve manufacturing costs.

Question

Quizplus · Accepted Answer

The statement is incorrect as it states that a direct cost is traced only to manufacturing costs, which is not true. Direct costs can be traced to any specific cost object, not just manufacturing costs.

An Indirect Cost Can Be Readily Traced to a Cost