Question

All costs other than direct materials cost, direct labour cost and direct expenses are known as ________.

• A. Indirect material cost
• B. Overhead
• C. Indirect labour cost
• D. Indirect expenses

Answer 1

The correct option is B Overhead

Direct Material, Direct Labour and Direct expenses are directly associated with the product cost and assigned to the specific product.

Those expenses which are not directly associated and can not be directly assigned to the product are called overheads.