________ costing includes only those costs that vary directly with the volume of an item produced.
A)Absorption
B)Break-even
C)Indirect
D)Direct

Question

Quizplus · Accepted Answer

Direct costing, also known as variable costing, only includes direct costs such as direct materials and direct labor that vary directly with the volume of production. Indirect costs, such as overhead costs, are not included in direct costing. This method is often used for short-term decision making and determining the contribution margin of products.

________ Costing Includes Only Those Costs That Vary Directly with the Volume