Which of the Following Factors Affect the Direct/indirect Classification of a Cost

question 50

Multiple Choice

Which of the following factors affect the direct/indirect classification of a cost?

• A) the level of budgeted profit for the next year
• B) the estimation of time required to complete the order
• C) the ability to execute an order in the most cost-efficient manner
• D) the design where a particular area is dedicated to a specific cost object

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Definitions:

Annual Interest Expense

The total amount of interest a company expects to pay on its debts over a year.

$100,000 Bond

A debt instrument issued by a corporation or government entity, with a principal amount of $100,000, to raise funds from investors.

Premium

An amount paid in addition to a standard price or rate, or the amount above par value for a security.

Bond Interest Expense

The cost incurred by an issuer of bonds for the interest payments made to bondholders over a period.