A direct cost must be monetarily significant to the total cost of the cost object.

Name: A direct cost must be monetarily significant to the total cost of the cost object.
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Question

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A direct cost is a cost that can be directly traced to a cost object, such as a product or service. Direct costs are typically monetarily significant to the total cost of the cost object because they represent the costs that are incurred specifically for the production of that cost object.

A Direct Cost Must Be Monetarily Significant to the Total