Question

Which costs can be directly traced to the product being manufactured? Group of answer choices Direct Costs Period Costs Sunk Costs Fixed Costs

Answer 1

The correct answer is: direct costs.

Step-by-step explanation:

The direct costs are the costs that can be easily traced to the goods or services or projects. It includes material and labor cost and distribution cost incurred in the production of a product.

It is contrasted to indirect costs which cannot be traced to a product and is not directly linked to a product.

The sunk costs are cost which has already been incurred are no longer relevant for economic decisions.

Fixed costs are the costs that do not vary with the change in the volume of product.

So, the direct cost is the correct answer.