In order to reduce sales staff turnover, the chief executive officer (CEO) has authorized all sales staff to be paid salaries instead of commissions of sales only. How should accounting change the classification of the sales staff compensation?

Direct costs are costs that can be directly attributed to a specific cost object, like salaries or commissions for sales staff. Material costs pertain to costs of raw materials used in production. Changing compensation from commissions to salaries does not alter the nature of direct costs to material costs, as both forms of compensation remain direct costs tied to labor.

Incremental costs refer to additional costs incurred when producing one more unit or undertaking a new project. Opportunity costs are the benefits missed when choosing one alternative over another. The change in compensation structure does not fit these definitions, as it does not represent additional costs or foregone alternatives, but rather a reclassification of existing costs.

Sunk costs are costs that have already been incurred and cannot be recovered, while imputed costs represent an estimated cost that reflects potential expenses. The change from commission to salary does not fit this framework, as it involves current compensation practices rather than costs that have already been incurred or hypothetical costs.