Which Statement About Indirect Costs Is FALSE

question 115

Multiple Choice

Which statement about indirect costs is FALSE?

• A)Today,indirect costs exceed 50% of total costs in many companies.
• B)Some indirect costs are variable.
• C)Managers can ignore indirect costs and make good operational decisions.
• D)Indirect costs include labor costs that cannot be traced to a particular product.

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Definitions:

Credit

Credit refers to the trust which allows one party to provide resources to another party wherein the second party does not reimburse the first party immediately, but promises either to repay or return those resources at a later date.

Net 45

A payment term indicating that the full payment is due 45 days after the invoice date.

Order Costs

Expenses related to placing an order for goods or services, including production or acquisition and delivery costs.

Carrying Cost

Expenses associated with holding inventory, including storage, handling, insurance, and opportunity costs.