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Question
A cost that is easily traceable to a cost object is known as ______.
Options
Direct cost
Indirect cost
Variable cost
Fixed cost
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Solution
A cost that is easily traceable to a cost object is known as direct cost.
Explanation:
Direct costs have a clear cause-and-effect relationship with a single cost object, so accountants can track them without employing split ratios. Raw materials or dedicated worker salary, for example, are direct expenses because their exact consumption can be measured directly on the final product.
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