Question

12 .If an expenditure is not allocated to a
cost centre or a cost unit then it is called
O
A. Direct
O
B. Indirect
C. Factory
D. Prime cost​

Answer 1

If an expenditure is not allocated to a  cost center or a cost unit then it is called indirect cost.

Option (B) is correct.

Explanation:

• Indirect costs are not accountable to an object.
• It means that such costs are not calculated and can be either fixed or variable.
• Personal, security, and administrative costs are included in the indirect cost.
• These costs on not have any direct link or relation with the production or cost center department.