Question

Which of the following statements are true? A direct cost is sometimes referred to as a common cost. A regional sales manager's salary is a direct cost of the regional office in which the sales manager works. A direct cost can be easily and conveniently traced to a specific cost object. An individual cost is either direct or indirect, regardless of the cost object.

Answer 1

Answer:

The correct answers are the following options: A regional sales manager's salary is a direct cost of the regional office in which the sales manager works - A direct cost can be easily and conveniently traced to a specific cost object.

Explanation:

On the one hand, the name of "direct costs" is refered to the ones that would be directly related to a cost object, therefore that these costs are easily recognizable to the person who manages the costs due to the fact that those will be the ones that are strictly referable to the object.

On the other hand, the "indirect costs" are the ones that have the characteristics of being the oppositive of the direct costs. Therefore that these type of costs are the ones that would not be easily referable to a cost object.