ECONOMICS

Detailed explanation-1: -Indirect costs include costs which are frequently referred to as overhead expenses (for example, rent and utilities) and general and administrative expenses (for example, officers’ salaries, accounting department costs and personnel department costs).

Detailed explanation-2: -Indirect cost allocation is an accounting function by which estimates are made to distribute indirect costs to programs or functions, in order to approximate their full cost.

Detailed explanation-3: -Indirect costs are, but not necessarily, not directly attributable to a cost object. It should be financially infeasible to do so. Indirect costs are typically allocated to a cost object on some basis.

Detailed explanation-4: -Indirect expenses are also known as overheads.