The Classification of a Cost as Either Direct or Indirect

question 25

Multiple Choice

The classification of a cost as either direct or indirect depends primarily on:

• A)the computer tracing system within the organisation.
• B)the definition of the cost object.
• C)the knowledge of the accountant.
• D)the type of business.

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Definitions:

Insoluble

Not able to be dissolved in a particular solvent, often referring to solids that cannot be dissolved in liquids.

Uric Acid

A waste product formed from the breakdown of purines, excreted in the urine; high levels can lead to gout and kidney stones.

Highly Toxic

Describes substances that are dangerous and can cause significant harm or death even in small amounts.

Ammonia

A colorless gas with a characteristic pungent odor, NH3, which is a compound of nitrogen and hydrogen and is used in the manufacture of fertilizers, explosives, and cleaning products.