Which of the Following Is Characteristic of Indirect Costs

question 187

Multiple Choice

Which of the following is characteristic of indirect costs?

• A)Indirect costs can be easily and accurately traced to a cost object.
• B)Indirect costs are shared between or among more than one cost object.
• C)Indirect costs should always be assigned to a cost object.
• D)Indirect costs include all labour.

---

Definitions:

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular accounting period.

Net Operating Income

The revenue earned from normal business operations after deducting operating expenses but before interest and taxes.

Activity Variance

The difference between the planned activity level of cost-driving activities and the actual level incurred, impacting the budget or costing analysis.

Materials

Items or substances used in the production or manufacturing of goods.