Asked by Vanessa Huynh on May 17, 2024
Verified
Which of the following items may be included in a service firm's overhead cost?
i. Upstream costs such as research and development
ii. Downstream costs such as marketing
iii. Professional labour costs
A) i only
B) i and ii
C) i and iii
D) i, ii and iii
Overhead Cost
Overhead Cost comprises indirect expenses related to the overall operations of a business, including costs not directly tied to specific products or services.
Professional Labour Costs
Expenses associated with employing specialized professionals, such as engineers, lawyers, or doctors, including salaries, benefits, and training costs.
- Attain an understanding of the constituents of overhead costs within service companies and their consequences on pricing policies and cost administration.
Verified Answer
TH
Tyler HalgrenMay 18, 2024
Final Answer :
B
Explanation :
Overhead costs in a service firm can include both upstream costs like research and development and downstream costs such as marketing. Professional labor costs are typically considered direct costs rather than overhead.
Learning Objectives
- Attain an understanding of the constituents of overhead costs within service companies and their consequences on pricing policies and cost administration.