Indirect production costs can be ignored because they do not affect the cost of a product.

Name: Indirect production costs can be ignored because they do not affect the cost of a product.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Indirect production costs such as rent, utilities, and salaries for support staff do affect the cost of a product. These costs are factored into the overhead costs and allocated to products based on predetermined allocation methods. Ignoring indirect costs can lead to inaccurate product costs and pricing decisions.

Indirect Production Costs Can Be Ignored Because They Do Not