Which of the following statements regarding overhead costs is not true?
A) Overhead costs are only allocated to a single cost object.
B) Overhead costs are also known as indirect costs.
C) Overhead costs might be traceable to an individual cost object but it is not cost effective to do so.
D) All of the statements about overhead costs are true.

Question

Quizplus · Accepted Answer

Overhead costs are not only allocated to a single cost object. In fact, overhead costs are indirect costs that cannot be easily and accurately traced to a single cost object. They are usually allocated to multiple cost objects based on a predetermined allocation base (such as machine hours or direct labor hours).

Which of the Following Statements Regarding Overhead Costs Is Not