The term “direct cost” and indirect cost” are commonly used in cost accounting. Classifying a cost as either direct or indirect depends upon
A) The behavior of the cost in response to volume changes.
B) Whether the cost is expended in the period in which it is incurred.
C) Whether the cost can be related readily to resources consumed for a cost object.
D) Whether an expenditure is unavoidable because it cannot be changed regardless of any action taken.
| Classifying a cost as either direct or indirect depends upon Whether the cost can be related readily to resources consumed for a cost object. | |||||||||||
| Option C is correct | |||||||||||
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