The Determination of a Cost as Being Either Direct or Indirect

question 216

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) the cost object chosen to determine its individual costs.

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Definitions:

Divisible

Capable of being divided or separated into smaller parts without losing its inherent qualities or value.

Utils

A hypothetical unit of measurement used in economics to quantify the level of utility or satisfaction derived from consuming goods or services.

Pairs of Socks

Multiple sets of soft foot garments, each set consisting of two items, typically worn for warmth, comfort, or hygiene reasons.

Opportunity Cost

The expense incurred by not choosing the second-best option available during decision-making.