ECONOMICS

Detailed explanation-1: -A cost driver is a factor that causes overhead costs.

Detailed explanation-2: -Overhead costs represent all of the costs on the company’s income statement except for those that are directly related to manufacturing or selling a product, or providing a service. A potter’s clay and potting wheel are not overhead costs because they are directly related to the products made.

Detailed explanation-3: -The correct answer is OPTION D: Indirect expense cost is also known as overhead cost or on cost. Indirect costs are costs that are not directly tied to a cost item, such as a project, facility, function, or product.

Detailed explanation-4: -Overhead expenses are all costs on the income statement except for direct labor, direct materials, and direct expenses. Overhead expenses include accounting fees, advertising, insurance, interest, legal fees, labor burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.