Which of these is an example of an indirect cost if Department T is the cost object?
A) Depreciation on the organisation's building, part of which is occupies by Department T
B) Depreciation on the computers held in Department T
C) Commission paid to the sales persons in Department T
D) A and B

Question

Quizplus · Accepted Answer

Depreciation on the organization's building is an indirect cost as it is not directly attributable to Department T but is incurred for the entire organization. Depreciation on computers held in Department T is also an indirect cost, but it is not the best choice as it is not allocated to the department based on its usage. Commission paid to sales persons in Department T is a direct cost as it can be directly linked to the department.

Which of These Is an Example of an Indirect Cost