An overhead cost that can be traced directly to either a service or production department:
A)Is called a "flow through" cost.
B)Requires less allocation effort.
C)Is charged directly to that department.
D)Must be variable.
E)Must be fixed.

Question

Quizplus · Accepted Answer

If an overhead cost can be traced directly to a service or production department, it means it is incurred by that department and should be charged directly to that department rather than being allocated to other departments. This is known as a direct cost and does not require any further allocation effort. Therefore, the correct answer is C. The other choices are not necessarily true or relevant to the question.

An Overhead Cost That Can Be Traced Directly to Either