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Which cost allocation concept defines overhead costs that cannot be directly traced to a single specific cost object in an economically feasible way?

APrime Costs
BTraceable Costs
CIndirect Costs
DDirect Costs

Explanation

* Indirect Costs cannot be tied directly to a specific product or cost center in a cost-effective way (e.g., factory utilities, supervisor salary).
* Direct costs (direct materials, direct labor) can be explicitly traced.
* Indirect manufacturing costs are pooled and allocated using cost drivers.

Exam Relevance
  • Topic: Cost Accounting
  • Subtopic: Cost Terminology
Submitted by: mcqstutor Team More Finance & Accounting MCQs →

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