Cost accounting – indirect expenses Which of the following are classified as indirect expenses (overheads)?

Introduction / Context:
In cost accounting, correct classification of costs supports pricing, budgeting, and control. Indirect expenses (overheads) cannot be traced directly to a single cost unit and are accumulated into logical pools.

Given Data / Assumptions:

• Overheads are grouped by function: factory, selling/distribution, and administration.
• Direct costs (materials, direct labor) are separately identified.

Concept / Approach:
Factory overheads include indirect materials, indirect labor, and factory expenses. Administrative overheads cover general management costs. Selling and distribution overheads relate to marketing, warehousing, and logistics. Together they comprise indirect expenses to be allocated or absorbed using rational bases.

Step-by-Step Solution:
Identify costs that cannot be directly traced to one product.Group them by function (factory, admin, selling/distribution).Apply absorption rates (e.g., machine hours, labor hours) to assign overheads to cost units.

Verification / Alternative check:
Reconciliation of total cost with financial accounts confirms overhead absorption and cost accuracy.

Why Other Options Are Wrong:
Direct labor is a direct cost, not an indirect expense. Hence, the comprehensive answer is “All of these.”

Common Pitfalls:
Misclassifying selling expenses as direct costs; using arbitrary bases that distort product costs.

Final Answer:
All of these