Advertisements
Advertisements
Question
A cost that is easily traceable to a cost object is known as ______.
Options
Direct cost
Indirect cost
Variable cost
Fixed cost
Advertisements
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.
APPEARS IN
RELATED QUESTIONS
Write a short note on direct costs.
Total variable cost per unit increases ______.
Which definition best describes indirect costs?
Which of the following best describes a fixed cost?
Explain the following:
Sunk cost
The term “variable costs” refers to ______.
Fixed cost is a cost which ______.
Amount spent to purchase a machinery is the example of ______ cost.
Classify cost according to its nature.
Explain with an example the meaning of fixed costs.
