CMA Intermediate · Cost Accounting · Direct Expenses
Direct expenses are best described as expenses that:
Direct expenses are costs incurred specifically for a cost unit and traceable to it, excluding direct materials and direct labour. Classification depends on traceability, not on whether the cost varies with volume, the function involved, or the mode of payment.
- AAre incurred on a specific cost unit and are traceable to it, other than direct material and direct labourCorrect
- BVary in total with the volume of production in all cases
- CAre incurred only in the selling and distribution function
- DAre always paid in cash at the time of production
Explanation
Direct expenses are defined by traceability to the cost object, excluding direct material and direct labour. Behaviour (variable or fixed), function or mode of payment does not determine whether an expense is direct.
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