Indirect costs that are part of overhead costs must be allocated to units of output by some formula.A familiar such cost is
A)variable cost.
B)direct cost.
C)total cost.
D)depreciation.

Question

Quizplus · Accepted Answer

Indirect costs that are part of overhead costs, such as depreciation, must be allocated to units of output by some formula. Variable costs and direct costs are not overhead costs and are generally easier to allocate to units of output. Total cost is a term that encompasses all costs, including indirect and direct costs, and is not a specific type of cost that needs to be allocated.

Indirect Costs That Are Part of Overhead Costs Must Be