Asked by Teresa Navarro P on May 02, 2024

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What would be an appropriate explanation for classifying clerical and administrative salaries as an indirect cost in the Wood Panel Plant example?

A) those costs are directly associated with this particular training program
B) those costs would have been incurred even if the program were cancelled by management
C) this classification decision was the authors' choice
D) clerical and administrative staff support many different departments, not just HR

Indirect Cost

Expenses not directly tied to the production of goods or services, such as overhead costs.

Clerical Salaries

Financial remuneration provided to employees performing administrative or secretarial tasks within an organization.

Administrative Salaries

Compensation paid to individuals occupying administrative or managerial positions, covering their roles in planning, directing, and overseeing operations.

  • Discriminate between the categories of training program expenditures such as direct, indirect, developmental, and overhead.
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KE
Konnor ErdigeMay 07, 2024
Final Answer :
B
Explanation :
Indirect costs are those that are not directly linked to a specific product or service, but are necessary for the operations of a business. In this case, clerical and administrative salaries would need to be paid regardless of whether the training program was implemented or not. Therefore, they are considered an indirect cost.