Indirect expenses are allocated to departments based on

Question

Quizplus · Accepted Answer

Indirect expenses cannot be directly traced to a specific department or product, so they are allocated based on some reasonable basis. This could be based on factors like the number of employees in a department, the square footage of the department, or the amount of time each department uses a particular resource, among others. There is no specific requirement from generally accepted accounting principles, board of directors, or stockholders on how to allocate indirect expenses.

Indirect Expenses Are Allocated to Departments Based on