Question

Projects often include indirect costs that are necessary to keep the organization running, but are not associated with one specific project. Which of the following items are most typically considered to be indirect costs?

Answer 1

Rent, expenses made by office, telephone expenses, administrative salaries are the items that fall under indirect cost.

Explanation:

Indirect costs are those cost which are not accountable directly. Indirect cost can be either variable or fixed. Indirect cost are also known as overhead expenses.

Rent can act as both direct as well as indirect cost. If rent is given for the plant as well as machinery for a company which is use by manufacturing units directly fall under direct cost but in other way when the rent is given for various official purposes it will fall under indirect cost.