Indirect costs refer to those expenses that can be entirely identified with or traced to a particular function or market segment such as a territory, customer, or product. In a territorial analysis, for example, each territory would be assigned the cost of salaries for those salespeople working exclusively in that territory.

Question

Quizplus · Accepted Answer

Indirect costs cannot be directly traced to a specific function or market segment; they are general expenses like utilities or rent that support multiple areas. The example given describes direct costs, which can be specifically assigned to a particular area.

Indirect Costs Refer to Those Expenses That Can Be Entirely