Which of these is an indirect cost if the cost object is the delivery department of a motorbike manufacturer?
A)Wages of delivery truck drivers
B)Petrol for delivery vehicles
C)Spare parts for the delivery vehicles
D)Council rates

Question

Quizplus · Accepted Answer

Council rates are an indirect cost as they are not directly related to the delivery department's activities but are necessary for the department's operations. The wages of delivery truck drivers and petrol for delivery vehicles are direct costs, as they directly relate to the delivery department's activities. Spare parts for the delivery vehicles can be either a direct or indirect cost, depending on the level of usage and necessity for the department.

Which of These Is an Indirect Cost If the Cost