The statement, "a cost that can be traced directly to a specific segment should be charged directly to that segment and not allocated to other segments." is true.
A price that can be directly attributed to the production of certain goods or services is termed as a direct cost. A direct cost can be linked to the cost item, which can be a service, a product, or a division. There are two main forms of costs or expenses that companies may incur: direct costs and indirect costs.
Direct costs are usually variable costs, which means they change depending on production levels including inventory. Furthermore, many cost, including indirect costs, are more complex to link to a particular product. Direct costs are any expenses incurred in the manufacture of a good, even if they only account for a small fraction of the total cost assigned to the production facility.
Learn more about Indirect costs here:
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