A cost object is anything for which cost data are
desired-including products, customers, jobs, and organizational sub units. For the purpose of
assigning cost to cost objects, costs are classified as:
Direct
Cost: A
cost that can be easily and conveniently traced to a specified cost objects.
Indirect
Cost: A
cost that cannot be easily and conveniently traced to a specified cost objects.
A common cost is a cost that is incurred to support a number of
cost objects but cannot be traced to them individually.
A particular cost can be direct or indirect depending on the
cost object.
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