Costs That Can Be Traced to a Cost Object in a Cost-Effective

question 133

True/False

Costs that can be traced to a cost object in a cost-effective way are called direct costs.

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Definitions:

Fixed Assets

Tangible assets expected to be used in business operations for a period longer than one year, such as equipment, real estate, and vehicles.

Full Capacity Sales

Full Capacity Sales represent the maximum sales level a company could achieve utilizing its available capacity without incurring additional capital expenses.

Net Income

Net income, also known as net profit, is the total earnings of a company after subtracting all expenses, taxes, and costs from total revenue; it indicates the financial health and profitability of a business.

Fixed Assets

Assets with a useful life extending beyond one year, used in the operations of a business, such as property, plant, and equipment.