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      Question

      In cost accounting, 'Overhead' refers to:

      A The cost of direct materials. Correct Answer Incorrect Answer
      B The wages paid to direct laborers. Correct Answer Incorrect Answer
      C Indirect costs that cannot be directly traced to a cost unit. Correct Answer Incorrect Answer
      D The prime cost of production. Correct Answer Incorrect Answer

      Solution

      Overheads, or indirect costs, are expenses of a business that are not directly linked to the production of a specific product or service. Examples include factory rent, utilities, indirect labor, and depreciation of factory equipment.

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