Question

Overhead costs: Multiple Choice Cannot be traced to cost objects in a cost-effective manner, but are instead allocated to cost objects. Are always variable costs. Cannot be allocated to cost objects. Are only incurred by manufacturing companies.

Answer 1

Cannot be traced to cost objects in a cost-effective manner, but are instead allocated to cost objects.

Step-by-step explanation:

Overhead costs refers to the costs or expenses that are incurred for operating a business activity. It is reflected on the income statement of a particular firm which includes all of the expenses but it excludes the direct material cost, direct labor cost and other direct costs. Theses expenses are incurred generally for producing the output.

It cannot be traced because these are very critical costs to operate a business.