Question

A leaky roof that allows rain to spoil the jobs beneath is charged to

a) Overhead
b) Direct labor
c) Direct materials
d) Job costing

Answer 1

The correct answer is a) Overhead. Overhead costs are indirect costs that are not directly tied to a specific job or product.

Step-by-step explanation:

The correct answer is a) Overhead.

Overhead costs are indirect costs that are not directly tied to a specific job or product. A leaky roof that causes damage to multiple jobs falls under overhead costs.

For example, if a construction company has multiple ongoing projects and the rain causes damage to materials and equipment on each project, the cost of repairs would be considered an overhead expense.