An example of a denominator reason for calculating annual indirect-cost rates includes ________.
A) higher heating bills in the winter
B) semi-annual insurance payments in March and September
C) higher levels of output demanded during the fall months
D) All of these answers are correct.

Question

Quizplus · Accepted Answer

Higher levels of output demanded during the fall months affect the allocation base (denominator) used to calculate indirect-cost rates, as it relates to the volume of production or activity.

An Example of a Denominator Reason for Calculating Annual Indirect-Cost