Distinguish between direct and indirect costs

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Reference no: EM1311700

Short question on direct and indirect costs.

Which one of the following statements best explains why companies want to distinguish between direct and indirect costs?
1. To evaluate business segments on the basis of only those costs directly traceable to each segment
2. To better determine whether a company is a large organization or a small organization
3. To determine the sales prices necessary to break even
4. To better distinguish between variable and fixed costs for each product
5. To better distinguish between materials costs and labor costs

Reference no: EM1311700

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