Direct vs. Apportioned Overheads

Steps:

• Identify overheads as indirect costs needing allocation to production departments.
• Distinguish direct costs, traceable to specific cost centers, from indirect costs requiring apportionment.
• Recognize building maintenance as potentially traceable to specific areas like a department's space.
• Conclude that traceable costs skip apportionment, avoiding arbitrary allocation.

Why D is correct:

• In cost accounting, costs identifiable with specific cost centers are treated as direct and allocated directly, not apportioned like general overheads (per standard costing principles).

Why the others are wrong:

• A: Fixed costs can still be apportioned if indirect; nature doesn't prevent inclusion.
• B: Maintenance supports production facilities, so it is necessary and typically included.
• C: Bases like floor area exist for maintenance, making this invalid.

Final answer: D