Regardless of the system used in departmental cost analysis:
A) Direct costs are allocated, indirect costs are not.
B) Indirect costs are allocated, direct costs are not.
C) Both direct and indirect costs are allocated.
D) Neither direct nor indirect costs are allocated.
E) Total departmental costs will always be the same.

Question

Quizplus · Accepted Answer

Indirect costs are allocated because they cannot be directly traced to a single product or department, whereas direct costs can be directly traced and are not allocated.

Regardless of the System Used in Departmental Cost Analysis