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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