Which of the Following Is Not True of Direct Costs

question 21

Multiple Choice

Which of the following is not true of direct costs?

• A) Direct costs are normally the major portion of product or service costs
• B) Direct costs are usually easily traceable
• C) Direct costs generally serve as the basis for allocation of supplier overhead costs
• D) Direct costs can vary a great deal depending upon the overhead allocation basis
• E) A tiny reduction in direct costs is often worth more to the buying firm than a major reduction in the percentage of profit

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Definitions:

Acetal-Forming Reactions

Chemical reactions that involve the conversion of aldehydes or ketones, in the presence of an alcohol, into acetals or ketals, respectively.

Organic Product

A compound containing carbon, produced as the result of an organic reaction.

Reaction

A chemical reaction involves the transformation of one or more substances into different substances through the breaking and forming of chemical bonds.

Organic Product

A compound or material which results from the transformation of organic precursors in a chemical reaction, usually in organic synthesis.