The cost which is related to specific cost object and cannot be economically traceable is classified as ________?
Correct answer: D. indirect cost
- A. line cost
- B. staff cost
- C. direct cost
- D. indirect cost
Explanation
An indirect cost relates to a cost object but cannot be traced to it economically, so it must be allocated using a reasonable basis. A direct cost, by contrast, can be specifically traced to the object.
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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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