Cost object
A cost object is anything for which a separate cost measurement is needed — a product, service, job, customer, department or project. The choice of cost object determines whether a given cost is classified as direct or indirect.
See it move
A regional sales manager's salary traces directly to the sales region as cost object — it is a direct cost there. Shift the cost object to an individual product sold across several regions, and that same salary becomes indirect, requiring apportionment, while the product's own direct material stays direct. There is no fixed list of direct versus indirect costs; the classification follows entirely from which cost object is chosen.
Check yourself
A regional sales manager earns an annual salary of €60,000. For which cost object would this salary be classified as a direct cost?