Which statement best describes indirect costs?
A) Indirect costs include all labour.
B) Indirect costs should always be assigned to a cost object.
C) Indirect costs can be easily and accurately traced to a cost object.
D) Indirect costs are shared between or among more than one cost object.

Question

Quizplus · Accepted Answer

Indirect costs are costs that cannot be easily or accurately traced to a single cost object. As a result, they are typically shared between or among multiple cost objects. Option A is incorrect because indirect costs do not include all labor costs, only those that cannot be easily traced to a specific cost object. Option B is incorrect because not all indirect costs can or should be assigned to a specific cost object. Option C is incorrect because indirect costs cannot be easily and accurately traced to a single cost object.

Which Statement Best Describes Indirect Costs