An example of an indirect cost would be __.

An example of an indirect cost would be __.

• A. Direct labor
• B. Salaries and benefits
• C. Materials
• D. Equipment rental

Answer: (B)

Indirect costs are expenses that can’t be traced to a single job or product because they support the overall operation. Salaries and benefits fit this, since they cover staff who assist multiple jobs (like supervisors, administrative, and support personnel) rather than a specific piece of work. Direct labor and materials are tied directly to a particular project, so they are direct costs. Equipment rental can be indirect if it serves many jobs, though it could be direct if the rental is for a single project. In standard classifications, salaries and benefits are the clearest example of an indirect cost.

Indirect costs are expenses that can’t be traced to a single job or product because they support the overall operation. Salaries and benefits fit this, since they cover staff who assist multiple jobs (like supervisors, administrative, and support personnel) rather than a specific piece of work. Direct labor and materials are tied directly to a particular project, so they are direct costs. Equipment rental can be indirect if it serves many jobs, though it could be direct if the rental is for a single project. In standard classifications, salaries and benefits are the clearest example of an indirect cost.