Which of the following describes direct costs?

Direct costs are expenses that can be traced directly to a specific cost object, such as a product, department, or project. This means that when calculating the total cost of a specific project or product, these costs can be directly attributed to that specific activity without ambiguity. Examples include raw materials and labor costs specifically associated with the production of a particular good.

The other options describe different types of costs but do not fit the definition of direct costs. For instance, costs incurred indirectly through various operations do not apply because they are considered indirect costs that cannot be directly linked to a specific cost object. Similarly, general administrative costs, which include expenses like office supplies and salaries of management, do not tie back to the specific production of goods or services. Lastly, while variable costs may fluctuate based on production volume, they can include both direct and indirect costs and do not exclusively define direct costs. Therefore, recognizing that direct costs are those that are directly associated with a cost object helps clarify their importance in budgeting and financial analysis.