Question

The costs of the Accounting Department at Central Hospital would be considered by the Surgery Department to be:

a. direct costs.
b. indirect costs.
c. incremental costs.
d. opportunity costs.

Answer 1

b) Indirect cost

Step-by-step explanation:

Accounting department is a service department, providing services to all business departments of the organisation, thus cost of accounting department cannot be attributed directly to any specific activity. Thus cost of accounting department to all business centers will be an indirect cost.