Cyber Company occupies one site and consists of Departments, Alpha, Delta and Omega. If Department Alpha is the cost object, which of the following is an example of an indirect cost?
A) Building rental
B) Salary of Department Alpha manager
C) Stationery costs of Department Alpha
D) Commission of the sales persons for Department Alpha

Question

Quizplus · Accepted Answer

Building rental is an indirect cost as it benefits all departments in the company, not just Department Alpha specifically. The salary of the Department Alpha manager, stationery costs of Department Alpha, and commission of sales persons for Department Alpha are all direct costs specific to Department Alpha.

Cyber Company Occupies One Site and Consists of Departments, Alpha