Which of the Following Statements Concerning Direct and Indirect Costs

question 185

Multiple Choice

Which of the following statements concerning direct and indirect costs is NOT true?

• A) Whether a particular cost is classified as direct or indirect does not depend on the cost object.
• B) A direct cost is one that can be easily traced to the particular cost object.
• C) The factory manager's salary would be classified as an indirect cost of producing one unit of product.
• D) A particular cost may be direct or indirect, depending on the cost object.

---

Definitions:

Compounded Monthly

Indicates that interest is calculated and added to the principal balance of an investment or loan on a monthly basis, leading to exponential growth over time.

Future Value

The value of an asset or amount of money at a specific date in the future that is equivalent in value to a specified sum today.

Rate of Interest

Another term for interest rate, it specifies the amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Rate of Return

A rise or fall in an investment's value during a specified time, shown as a percentage of the cost of the investment.