Interviewer's salary (This answer is incorrect!)
The correct answer is: Changes in the organization's public image
Cost allocation...
Indirect cost rate is equal to Indirect Cost Pool divided by Indirect Cost Allocation Base.
Indirect cost rate is equal to Indirect Cost Pool divided by Indirect Cost Allocation Base.
A direct cost example is the medical expense claim, and an example of an indirect cost is the lost productivity of the injured employee AND the staff who has to process the claim.
If indirect labor change with the change of units of product then indirect labor is a variable cost. If change in the quantity of units has no impact on indirect labor cost then it is a fixed cost.
Research and development cost is indirect cost as this cost is not directly required to manufacturing the production units and that’s why always an indirect cost.
The process of assigning indirect costs is called cost allocation. It involves distributing indirect costs, such as overhead expenses, to various departments, products, or projects based on a systematic approach. This ensures that each cost object bears a fair share of the total indirect costs incurred by the organization. Proper allocation is essential for accurate financial reporting and decision-making.
indirect
Indirect
No
yes cost function measures the direct costs along with indirect cost.
Calculating an indirect cost rate involves several steps. First, identify and accumulate total indirect costs, which are expenses not directly tied to a specific project, such as administrative salaries and utilities. Next, determine the appropriate allocation base—often total direct costs or direct labor costs—over which these indirect costs will be spread. Finally, divide the total indirect costs by the chosen allocation base to derive the indirect cost rate, expressed as a percentage.