Question 1
All of the following are factors affecting direct versus indirect cost classification except:
◦ materiality of the cost
◦ cost accuracy
◦ information technology's ability to trace costs in an economically feasible way
◦ design of operations
Question 2
Classifying a cost as either direct or indirect depends upon ________.
◦ the behavior of the cost in response to volume changes
◦ whether the cost is expensed in the period in which it is incurred
◦ whether the cost can be traced to a particular cost object in an economically feasible way
◦ whether a cost is fixed or variable