Which of the Following Does NOT Affect the Direct/indirect Classification

question 105

Multiple Choice

Which of the following does NOT affect the direct/indirect classification of a cost?

• A)the level of budgeted profit for the next year
• B)available technology to gather information about the cost
• C)the design of the operation
• D)the materiality of the cost in question

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Definitions:

Credit Policy

Guidelines a company follows to determine credit terms for customers, such as payment period and discounts for early payment.

Restocking Cost

The expenses involved in replenishing inventory or stock.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.