COST ACCOUNTING
VARIABLE COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Indirect costs are those costs which are not controlled directly by a manager.
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Indirect costs are those costs which cannot be directly associated with a product or service.
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Indirect costs are always fixed.
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Indirect costs are always manufacturing overhead costs.
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Detailed explanation-1: -The correct option is B. Indirect costs are those costs which cannot be directly associated with a product or service. Indirect costs are those costs which cannot be directly associated with a product or service.
Detailed explanation-2: -An indirect cost is any cost not directly identified with a single, final cost objective, but identified with two or more final cost objectives or an intermediate cost objective. It is not subject to treatment as a direct cost.
Detailed explanation-3: -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.
Detailed explanation-4: -What are indirect costs? Indirect costs extend beyond the expenses you incur when creating a product; they include the costs involved with maintaining and running a company. These overhead costs are the ones left over after direct costs have been computed.
Detailed explanation-5: -Examples of indirect costs may include: building rent, legal expenses, business insurance, advertising expenses, accounting and administrative salaries, office supplies, and certain utilities.