Whether a Cost Is Classified as Direct or Indirect Will

question 17

Multiple Choice

Whether a cost is classified as direct or indirect will depend on:

• A) the nature of the cost object.
• B) whether the cost can be economically traced to the cost object.
• C) whether the organisation is in a manufacturing or service industry
• D) the nature of the cost object AND whether the cost can be economically traced to the cost object.

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Definitions:

Strong Axiom

A stringent condition in economics that, when applied, implies a level of consistency in consumer choice behavior beyond what is required by weaker axioms.

Revealed Preference

A theory suggesting consumers' preferences can be inferred from their purchasing habits.

Prices

Monetary values assigned to goods and services in a market, determining how resources are allocated among consumers and producers.

Weak Axiom

A less stringent rule or principle that is accepted as valid, often used in economic theories to make assumptions about consumer behavior.