For Each of the Following Costs, Classify Them as Either

question 224

Multiple Choice

For each of the following costs, classify them as either:
-Administrative office salaries

• A)Direct costs
• B)Indirect costs
• C)Neither direct nor indirect costs

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Definitions:

Support Department

An organizational unit that provides the necessary services for the operations departments but does not directly engage in the core activities of the business.

Single Plantwide Rate

A costing method where a single overhead rate is used to allocate all manufacturing overhead costs uniformly across all products, regardless of the department where costs are incurred.

Multiple Production Rates

Refers to the capability of a manufacturing process or facility to operate at various output rates to meet different levels of demand.

Activity-Based Costing

A costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.