Indirect costs are:
A)costs that are not worth the effort to trace to a specific cost object.
B)costs that change,in total,in direct proportion to changes in activity levels.
C)always irrelevant.
D)costs that remain constant no matter the activity level.

Question

Quizplus · Accepted Answer

Indirect costs are costs that are not easily or economically traced to a specific cost object, such as a product or department. These costs include overhead expenses such as rent, utilities, and administrative salaries. While they are necessary for the operation of a business, they are not directly tied to the production of a specific product or service, making them difficult to allocate accurately. Therefore, it is not worth the effort to trace them to a specific cost object.

Indirect Costs Are