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Variable costs are costs that can rise or fall depending on how much work I contract. Say I sign up 20 jobs this year, I will have to hire more employees, buy them trucks, rent them cell phones, and those costs will correspond to the amount of work going on, therefore variable.
• Chapter 15: Discussion Question 16.
What is the difference between a direct cost and an indirect cost? Give an example of each in the context of teaching an accounting class at your school.
Direct costs are costs that are specifically traceable to a unit of business or segment being analyzed. Example: ???
Indirect costs are costs normally incurred for the benefit of several segments within the organization; sometimes called common costs or joint costs...
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