Which of the following statements is correct?
A) Overhead consists of only indirect labour in service costing.
B) Direct material costs are the dominant cost type in service costing.
C) Overheads are less important for service costing than production costing.
D) Indirect materials can arise in service organisations.

Question

Quizplus · Accepted Answer

Indirect materials can arise in service organizations. While direct material costs are not typically a significant cost type in service costing, overheads (including indirect materials and indirect labor) can be significant and must be properly allocated to accurately determine the cost of services provided.

Which of the Following Statements Is Correct