Costs readily traced to a department because they are incurred for that department's sole benefit are called expenses.

The statement you provided is partially correct, but it requires clarification. The costs that are readily traced to a specific department because they are incurred for that department's sole benefit are typically referred to as "direct costs" or "direct expenses."

Direct Costs vs. Indirect Costs:

1. Direct Costs: These are expenses that can be directly attributed to a specific department, product, or service. For example, the salaries of staff working exclusively in a department, materials consumed by that department, and equipment used solely by that department are considered direct costs.

2. Indirect Costs: These are costs that cannot be directly traced to a specific department. Instead, they benefit multiple departments. Examples include utilities, administrative salaries, and rent for facilities shared across departments.

Understanding the distinction between these types of costs is crucial for budgeting, financial reporting, and cost management within an organization.