The Determination of a Cost as Being Either Direct or Indirect

question 94

Multiple Choice

The determination of a cost as being either direct or indirect depends upon

• A)the accounting system.
• B)the allocation system.
• C)the cost tracing system.
• D)only the cost object chosen to determine its individual costs.
• E)the choice of the cost object, and the materiality of the cost in question.

---

Definitions:

Unidentifiable Intangible

An intangible asset that lacks physical substance and cannot be easily separated or identified from the business itself.

Legal Fees

Fees charged for legal services provided by lawyers or law firms.

Patent

An exclusive right granted for an invention, allowing the patent holder to exclude others from making, using, or selling the invention for a certain period of time.

Copyrights

Legal rights granted to creators of original works, giving them exclusive rights to use and distribute those works for a certain period of time.