A direct cost is a cost that can be traced to a particular cost object, such as a specific product or department. Examples of direct costs include materials, labor, and shipping costs directly related to producing a product. Therefore, option D is the correct answer.

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A Direct Cost Is

Question 6

Multiple Choice

A direct cost is:

A) A cost that can be observed directly and therefore measured accurately.
B) A cost resulting from the specific directions of a senior manager.
C) A cost that directly relates to sales.
D) A cost that can be traced to a particular cost object.
E) None of the above

Correct Answer: