Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 23 - No. 10)
What is the difference between 'direct costs' and 'indirect costs'?
Direct costs are fixed, while indirect costs are variable.
Direct costs are always variable, and indirect costs are always fixed.
Direct costs can be easily traced to a specific product or service, while indirect costs cannot.
There is no difference between direct and indirect costs; they are the same.
Explanation
Direct costs can be directly traced, while indirect costs are not readily traceable to a cost object.
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