why are fringe benefits considered variable costs?

Expert Solution

Fringe Benefits

Where any Non salary benefit provided by an employer to an employee is considered a Fringe Benefit

some of the Examples of Fringe Benefits

Insurance , Company car , Employee Discount ,health insurance, tuition reimbursement etc

Why Fringe Benefits considered as indirect cost

In certain circumstances where a fringe benefit is provdied and it is difficult to assign some of the Fringe benefits to a particular project or program and it may ne necessary to count it as an indirectcost though this is rare

Fringe benefits for administrative and clerical staff for instance might be classified as indirect cost

Direct Cost

A direct cost is a price that can be directly tied to the production of specfic goods or services

When Fringe Benefits considered as direct cost

Fringe Benefits are usually a direct cos to the bussiness in terms of accounting as long as they are allocable to direct labour on a consistent basis

ekkarill92 answered 2 years ago

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