Indirect Cost
Finance
Indirect Cost
Cost supporting multiple products or activities that cannot be directly traced economically to one cost object.
Examples
- 01The cost of the quality lab is an indirect cost because it supports all product lines.
- 02The controller reviews how indirect costs are spread across products to avoid unfair price decisions.
- 03Cutting indirect costs, such as simplifying approval paperwork in planning, lowers the cost of every product line at once.