Soles is a footwear company which has recently set up its store in Ambrosia. To manufacture its products, Soles incurs a range of different costs. Which of the following would be an example of an indirect cost?
A)Cost of machines to produce shoes
B)Salary paid to factory workers
C)Electricity used to run its factories
D)Cost of leather used to manufacture shoes

Question

Soles is a footwear company which has recently set up its store in Ambrosia. To manufacture its products, Soles incurs a range of different costs. Which of the following would be an example of an indirect cost?
A)Cost of machines to produce shoes  
B)Salary paid to factory workers  
C)Electricity used to run its factories  
D)Cost of leather used to manufacture shoes

Quizplus · Accepted Answer

Indirect costs are not directly related to the products or services of the project, but are indirectly related to performing the project. For example, indirect costs would include the cost of electricity, paper towels, and other necessities in a large building that houses 1,000 employees who work on many projects.

Soles Is a Footwear Company Which Has Recently Set Up