The classification of a cost as either direct or indirect depends primarily on:

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The classification of a cost as either direct or indirect depends primarily on the definition of the cost object. A cost is considered direct if it can be traced directly to the cost object, while a cost is considered indirect if it cannot be traced directly and must be allocated to the cost object using a cost allocation method. The type of business and the computer tracing system may be factors, but they are not the primary factor in determining the classification of costs. The knowledge of the accountant may be important, but it is not the primary factor.

The Classification of a Cost as Either Direct or Indirect