Direct cost incurred can be identified with_______________?
Correct answer: A. Each unit of output
- A. Each unit of output
- B. Each Department
- C. Each Month
- D. Each Executive
Explanation
A direct cost can be traced economically and specifically to each unit of output, such as the material used in that unit. Department, month and executive may be cost classifications, but they do not define a direct cost.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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