Since overhead costs are indirect costs,
A)they require some process of allocation.
B)they can be easily traced to production.
C)a predetermined overhead rate is not advantageous.
D)they cannot be allocated.

Question

Quizplus · Accepted Answer

Overhead costs are indirect costs that cannot be directly traced to a particular product or service. Therefore, they require some process of allocation to be assigned to a specific product. This is why a predetermined overhead rate is often used to allocate overhead costs to products or services based on a relevant cost driver.

Since Overhead Costs Are Indirect Costs