Whether a management accountant classifies overtime premium as direct or indirect depends on the circumstances.

Question

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The classification of overtime premium as direct or indirect cost depends on the situation. For example, if the overtime was directly incurred to produce a specific product or service, it would be classified as a direct cost. However, if the overtime was incurred to meet general operational demands and could not be traced to a particular product or service, it would be an indirect cost.

Whether a Management Accountant Classifies Overtime Premium as Direct or Indirect