Question

An item of cost that is direct for one business may be _________ for another business.

• A. Important
• B. Direct
• C. Indirect
• D. None of the above

Answer 1

Answer: (C)

Indirect

Cost may be a direct cost or indirect cost. The cost which is directly associated with the production activity is a direct cost. Indirect cost are those cost which are not directly associated with the production like advertisement. One direct cost may be an indirect cost depending upon the nature of the business.