In a decision situation which one is the cost not likely to contain
a variable cost component
a) Material
b) Labour
c) Overhead
d) Direct expenses
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Answer:
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The correct answer is option (d) Direct Expenses.
Explanation:
- In a decision situation Direct Expenses is one of the cost not likely to contain.
- Decision situation, or decision-demanding situation, refers to a situation when decision making is inevitable.
- In the decision situation, the need for a decision is apparent and the decision maker must begin to define the problem and get involved in the decision making process.
- Direct expense is an expense incurred that varies directly with changes in the volume of a cost object.
- A cost object is any item for which you are measuring expenses, such as products, product lines, services, sales regions, employees, and customers.
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