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5 January, 18:38

Indirect costs occur when

A. resources are shared by more than one product or service.

B. costs are directly traced to products or services.

C. controllable costs are incurred by cost objectives.

D. All of these answer choices are correct.

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Answers (1)
  1. 5 January, 19:28
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    The answer is A. resources are shared by more than one product or service.

    Explanation:

    Indirect cost are costs that are not directly related or traced to any product or activity. They are shared or used by more than one activities. Examples include, Adminstrative expenses, advertising expenses, telephone expenses, rent, office expenses etc.

    Like direct cost, indirect cost can be fixed or variable.

    Indirect costs are used by business as a whole and not just limited to a particular product.

    Option B is not correct. Cost that are directly traced or related to a product is known as direct material. For example, direct labour and direct material used to produce a particular good.

    Option C and D are also wrong
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Home » Business » Indirect costs occur when A. resources are shared by more than one product or service. B. costs are directly traced to products or services. C. controllable costs are incurred by cost objectives. D. All of these answer choices are correct.
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