Question

    Which of the following statements are true or false?

    (i) Direct material cost: Cost of the material that can be directly allocated to a cost centre or a cost object in an economically feasible way. (ii) Direct labour cost: Cost of the wages of those workers who are readily identified or linked with a cost centre or cost object. (iii) Direct expenses: Expenses other than direct material and direct labour that can be identified or linked with a cost centre or cost object.
    A (i) True (ii) False (iii) True Correct Answer Incorrect Answer
    B (i) True (ii) True (iii) False Correct Answer Incorrect Answer
    C (i) False (ii) True (iii) True Correct Answer Incorrect Answer
    D (i) True (ii) True (iii) True Correct Answer Incorrect Answer

    Solution

    All three statements accurately describe direct material cost, direct labor cost, and direct expenses. (i) Direct material cost: Cost of the material that can be directly allocated to a cost center or a cost object in an economically feasible way. (ii) Direct labor cost: Cost of the wages of those workers who are readily identified or linked with a cost center or cost object. (iii) Direct expenses: Expenses other than direct material and direct labor that can be identified or linked with a cost center or cost object.

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