Which of the Followings Statements Is Correct Regarding Direct and Indirect

question 157

Multiple Choice

Which of the followings statements is correct regarding direct and indirect costs?

• A) Direct costs cannot easily be traced to a cost object, whereas indirect costs can be easily traced to a cost object.
• B) Direct costs can be easily traced to a cost object, whereas indirect costs cannot be easily traced to a cost object.
• C) Direct costs are always relevant to a particular cost decision, whereas indirect costs are never relevant to a cost decision.
• D) Direct costs are never relevant to a particular cost decision, whereas indirect costs are always relevant to a cost decision.

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Definitions:

Loan Repayment

The process of paying back borrowed money, typically consisting of principal and interest components, over an agreed period.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Foreign Exchange Gain

A profit arising from fluctuations in the value of foreign currencies relative to one's home currency.

Exchange Rates

The pace at which one form of currency can be swapped for another, affecting international commerce and investments.