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how does the direct method of cost allocation work
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∙ 13y ago
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Are all direct cost are variable?
Yes generally direct costs are variable costs but there may be some direct costs which can be fixed costs as well.
Why distinguish direct costs from indirect costs?
It is done so to keep control on costs as direct costs are controllable while indirect costs are not.
Is it true that all direct costs are variable costs?
All variable costs are those costs which vary with the variation in the volume of production as well as direct costs are those costs which are directly attributable to any specific unit of product so it may be accepted that all direct costs are variable costs but fixed costs may also be direct cost.
Why do managers consider direct costs to be more accurate then indirect costs?
Answer this question...why do managers cosider direct costs to be more accurate than indirect costs?
Is direct cost and controlled cost the same?
No direct cost and controlled costs are both separate costs.
Describe typical critriia that determine work methods for routine types of projects?
General and administrative costs and Direct costs are the criteria that determine work methods for routine types of projects.
Are all direct cost are variable?
Yes generally direct costs are variable costs but there may be some direct costs which can be fixed costs as well.
Why distinguish direct costs from indirect costs?
It is done so to keep control on costs as direct costs are controllable while indirect costs are not.
Is it true that all direct costs are variable costs?
All variable costs are those costs which vary with the variation in the volume of production as well as direct costs are those costs which are directly attributable to any specific unit of product so it may be accepted that all direct costs are variable costs but fixed costs may also be direct cost.
What are the three basic methods to allocate service department costs to production departments or programs in a not-for-profit organization?
There are three basic methods to allocate service department costs to production departments or programs in a not-for-profit: (1) the direct method; (2) the step method; and (3) the reciprocal method.
Why do managers consider direct costs to be more accurate then indirect costs?
Answer this question...why do managers cosider direct costs to be more accurate than indirect costs?
Total costs less conversion costs equal to material costs?
Conversion cost is total of: Options Direct material and direct wages Direct material, direct wages, and production overheads Direct wages and production overheads. None of the above
Is direct cost and controlled cost the same?
No direct cost and controlled costs are both separate costs.
Costs can either be prime costs or conversion costs but not both?
direct labor
What costs other than direct materials costs and direct labor costs incurred in the manufacturing process are classified as?
Indirect costs(salaries, materials not directly involved in manufacturing), period costs(selling and admin costs)
Are indirect or direct costs easier to allocate?
If you're referring to income taxes, direct costs are easier to allocate.
Is direct cost same to indirect cost?
No direct costs and indirect costs are not same and opposite of each other.
