The Costs That Are Easiest to Trace Directly to Products

question 61

Multiple Choice

The costs that are easiest to trace directly to products are

• A) direct materials and direct labor.
• B) direct labor and overhead.
• C) direct materials and overhead.
• D) none of the above; all three costs are equally easy to trace to the product.

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Definitions:

Decision-making Authority

The power or right vested in individuals or groups to make important decisions regarding policies, practices, or procedures within an organization.

Hierarchy

A system or organization in which people or groups are ranked one above the other according to status or authority.

Vertical Division of Labour

The differentiation of job roles based on hierarchical positions within an organization, where tasks are divided according to levels of authority and expertise.

Functional

Related to the natural or intended purpose of something, describing something that is designed to be practical and useful rather than merely attractive.