ECONOMICS

Detailed explanation-1: -A direct cost is a price that can be directly tied to the production of specific goods or services. A direct cost can be traced to the cost object, which can be a service, product, or department.

Detailed explanation-2: -A direct cost is a cost that cannot be easily traced to the particular cost object under consideration.

Detailed explanation-3: -Direct costs are expenses associated with production and sales. The cost of raw material and labor required to manufacture a product would be categorized as direct costs. Indirect costs are fixed expenses a business incurs to keep the company running no matter the activity level.

Detailed explanation-4: -Direct costs are expenses that a company can easily connect to a specific “cost object, ” which may be a product, department or project.

Detailed explanation-5: -Cost allocation is the process of identifying, accumulating, and assigning costs to costs objects such as departments, products, programs, or a branch of a company.