Direct expenses are assigned
to departments on the basis of
O Percentage of sales
O Percentage of purchases
O Actual expenses incurred
O Estimated expenses
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Answer:
Actual expense incurred
Explanation:
Direct expneses are those which are those which can be directly assigned, for example salary of marketing staff can be directly assigned to marketing department
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Direct expenses are assigned to departments on the basis of actual expenses incurred.
Direct expenses:
"Direct expense is an expense incurred that varies directly with changes in the volume of a cost object."
More about direct expenses:
- Direct Expenses are also mentioned as direct cost. Direct costs are usually variables but sometimes are fixed. The term 'direct cost' is used in accounting while the same entity is mentioned as 'specific cost' in economics.
- Few examples of direct expense includes payment for the labours, cost of raw materials, energy source, and other supplies required for production.
- They are usually accounted under the section of 'Cost of Sold Goods' in the income statement. In such case, it is referred as contribution margin income statement.
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