Costs that are not easily traceable to a specific cost object are known as:

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BlackTom AI · Accepted Answer

Question: Costs that are not easily traceable to a specific cost object are known as:

Option 1: Direct costs. Direct costs are those that can be traced directly to a specific cost object, such as a particular product or department. Therefore, this option is not correct because it describes the opposite of indirect costs.

Option 2: Fixed costs. Fixed costs are costs that do not vary with the level of activity in the short run. While some fixed costs may be allocated to cost objects, the key characteristic of fixed costs is their behavior, not traceability. They can be either direct or indirect depending on whether they can be traced to a specific cost object. So this option is not the best or most precise match for the given definition.

Option 3: Indirect costs. Indirect costs are costs that cannot be easily traced to a single cost object. They are typically allocated across multiple cost objects (e.g., overhead, utilities, depreciation). This option matches the definition in the question and is the correct conceptual fit.

Option 4: Variable costs. Variable costs change with the level of activity and can be traced to cost objects when they vary with the object (e.g., materials used for a product). While some variable costs can be traced, the defining feature asked about here is traceability to a single cost object, which makes this option not correct as a general rule for the term described.

Summary: The term that best fits costs not easily traceable to a specific cost object is indirect costs, because their allocation across objects is needed due to lack of direct traceability. Direct costs are traceable, fixed costs describe cost behavior rather than traceability, and variable costs are typically traceable to activities or products when they vary with usage.

2601-ACC1064 FUNDAMENTALS OF ACCOUNTING Pop Quiz 1 2601-ACC1064 FUNDAMENTALS OF ACCOUNTING Pop Quiz 1

Costs that are not easily traceable to a specific cost object are known as:

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