Question

An example of a numerator reason for calculating annual indirect-cost rates includes:

A) fewer production workdays in a month
B) payment of estimated taxes four times a year
C) higher snow-removal costs during the winter
D) Both B and C are correct.

Answer 1

Higher snow-removal costs during the winter is an example of a numerator reason for calculating annual indirect-cost rates.

Step-by-step explanation:

An example of a numerator reason for calculating annual indirect-cost rates includes higher snow-removal costs during the winter. This is because snow-removal costs are considered indirect costs that can fluctuate based on the weather conditions during the winter season. The costs associated with snow removal, such as labor, equipment, and materials, are not directly tied to the production process and need to be allocated to the products or services being produced. Therefore, higher snow-removal costs during the winter would be a valid numerator reason for calculating annual indirect-cost rates.