Question

Direct costs:A) are incurred to benefit a particular accounting periodB) areincurred due to a specific decision.C) can be easily traced to a particular cost object.D) are the variable costs of producing a product.E) are only incurred in a financial accounting context.

Answer 1

The correct answer is letter "C": can be easily traced to a particular cost object.

Step-by-step explanation:

Direct Cost for finished products refers to the goods and services which are used directly in production. Other costs, such as rent and production-side insurance, are indirect costs. These costs may be allocated to the cost of the finished goods, but they are not direct costs, as they do not vary with the level of production.

Direct costs can be traced to the service, product, or department generating the expenditure.