Direct costs are costs that can be traced to a specific cost object (such as a product or department) and are economically feasible to measure. This means that the cost can be directly linked to the cost object, and the cost of measuring it should not be too high. This is important for accurately determining the cost of producing a specific product or providing a specific service.

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Direct Costs

Question 11

Multiple Choice

Direct costs

A) are anything for which a measurement of costs is desired.
B) are costs related to a particular cost object that can be traced to that cost object in an economically feasible (cost-effective) way
C) focus specifically on the costing needs of the CFO
D) provide all information for management decision needs

Correct Answer: