ECONOMICS

Detailed explanation-1: -Indirect costs, on the other hand, are expenses unrelated to producing a good or service. An indirect cost cannot be easily traced to a product, department, activity, or project.

Detailed explanation-2: -In general, indirect costs are costs that benefit more than one specific project or good that is being produced and cannot be easily traced to a single project or good being produced.

Detailed explanation-3: -“Indirect costs” are those that cannot be directly traced to a single cost object. Because they cannot be traced directly to a specific cost object, indirect costs must instead be allocated to all of the products they are used to produce.

Detailed explanation-4: -The correct answer is: 4) Direct costs can be traced easily to a cost object, but indirect costs cannot be easily traced to a cost object. Direct costs are those costs which can be traced from the final product produced. An example of direct cost is direct labor and direct materials.

Detailed explanation-5: -Indirect costs are the costs of running a business and going to market with a product or service-regardless of the volume manufactured and/or sold. In other words, they are not directly related to making a product or service, or buying a wholesale product to resell.