Projects Often Include Indirect Costs That Are Necessary to Keep

question 6

Multiple Choice

Projects often include indirect costs that are necessary to keep the organization running,but are not associated with one specific project.Which of the following items are most typically considered to be indirect costs?​ 

• A) costs associated with material and purchased parts 
• B) the cost of labor provided by project team members, consultants and subcontractors 
• C) executive salaries, utilities and insurance 
• D) travel cost for the project team

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Definitions:

GAAP

Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting in the United States.

Operating Activities

Operating activities relate to the primary revenue-generating activities of a business, influencing its net income and cash flows from operations.

Prepaid Expenses

Prepaid expenses represent payments made in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are consumed or used.

Operating Activities

Transactions and events related to the primary business activities, such as selling products or services, which are reflected in the cash flows.