During the month of March the Richards Company, which operates one factory location and one administrative location, reported the following costs: $$\begin{array} { l l }
\text { Postage on bills sent to customers } & \$ 100 \
\text { Rent on its factory building } & \$ 3,800 \
\text { Depreciation used on administrative office computers } & \$ 600 \
\text { Bonuses paid to the Vice-President of Sales } & \$ 1,500
\end{array}$$ Indirect costs total:
A)$700
B)$3,800
C)$2,200
D)$2,100

Question

During the month of March the Richards Company, which operates one factory location and one administrative location, reported the following costs: $$\begin{array} { l l } 
\text { Postage on bills sent to customers } & \$ 100 \
\text { Rent on its factory building } & \$ 3,800 \
\text { Depreciation used on administrative office computers } & \$ 600 \
\text { Bonuses paid to the Vice-President of Sales } & \$ 1,500
\end{array}$$ Indirect costs total:
A)$700
B)$3,800
C)$2,200
D)$2,100

Quizplus · Accepted Answer

Indirect costs include rent on the factory building ($3,800) and depreciation on administrative office computers ($600), totaling $4,400. However, the question asks for indirect costs related to the factory, which is only the rent ($3,800). The correct total for indirect costs related to the administrative location is $600. The total indirect costs for both locations are $4,400, but the question seems to focus on the administrative side, which is $600.

During the Month of March the Richards Company, Which Operates