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 a cost-effective manner
C) focus specifically on the costing needs of the CFO
D) are costs related to a particular cost object that cannot be traced to that cost object in a cost-effective manner

Question

Quizplus · Accepted Answer

Direct costs are costs that can be directly traced to a specific cost object, such as a product or service, and can be allocated accurately. These costs are associated with a particular cost object in a cost-effective manner. Option A is incorrect because it is too broad and not specific to direct costs. Option C is incorrect because direct costs do not focus specifically on the CFO's costing needs. Option D is incorrect because costs that cannot be traced to a cost object are indirect costs.

Direct Costs ________