BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Assigning direct costs poses more problems than assigning indirect costs. False, Assigning direct costs poses more problems than assigning indirect costs. Period costs are never included as part of inventory.

Detailed explanation-2: -Direct costs are often variable costs, meaning they fluctuate with production levels such as inventory. However, some costs, such as indirect costs are more difficult to assign to a specific product. Examples of indirect costs include depreciation and administrative expenses.

Detailed explanation-3: -Indirect costs are much harder for companies to track or assign because they don’t directly relate to any specific output. These include utilities like electricity and water and rent or insurance premiums on property that the business uses in operations, such as buildings or computers.

Detailed explanation-4: -According to managers, direct costs are more accurate than indirect costs because when cost allocation is done, the manager is uncertain whether the allocation of costs helps to determine the demand for resources for a cost object.

Detailed explanation-5: -The 1 that is not true regarding direct and indirect costs, is a whether a particular cost is classified as direct or indirect does not depend on the cost objects. It does actually depend on the cost object, so particular cost cap, classificationas, direct or indirect, is in fact dependent on the cost.