What best describes indirect costs?

Indirect costs are best described as expenses that are not directly traceable to specific products or services. This means that these costs cannot be easily attributed to a single item produced or service rendered. Instead, they are general expenses that support the overall production or service delivery process.

For instance, overhead costs such as utilities, rent, or administrative salaries are common examples of indirect costs. These expenses are necessary for the business operation but cannot be linked to any one product or service directly.

In contrast, direct costs can be easily tied to specific products, which makes them distinct from indirect costs. The other options focus on direct traceability, category specificity, or situational limitations (fixed or variable), which do not accurately capture the essence of what constitutes indirect costs. Thus, the choice that emphasizes the lack of direct traceability best aligns with the definition of indirect costs.