Which of the following is an indirect cost example?

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Multiple Choice

Which of the following is an indirect cost example?

Explanation:
Indirect costs are expenses that can’t be traced to a single project or product; they support the overall operation and are treated as overhead. Insurance fits this because it covers risk across the business and multiple jobs, not tied to a specific quantity of material or a particular portion of work. In contrast, lumber, nails, and concrete are direct costs because they are materials that can be directly charged to a specific project. So insurance is the indirect cost example.

Indirect costs are expenses that can’t be traced to a single project or product; they support the overall operation and are treated as overhead. Insurance fits this because it covers risk across the business and multiple jobs, not tied to a specific quantity of material or a particular portion of work. In contrast, lumber, nails, and concrete are direct costs because they are materials that can be directly charged to a specific project. So insurance is the indirect cost example.

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