Indirect costs are not directly identified with a cost object. Indirect costs of a particular cost object are costs that are related to that cost object but cannot be traced to it in an economically feasible or cost-effective way. Indirect costs often comprise a sizable percentage of the costs assigned to cost objects such as products, distribution channels, and customers. The four objectives for allocating indirect costs to these cost objects are as follows (Bhimani, Horngren, Datar and Rajan, 2015: 124):

1. To provide information for economic decisions,

2. To motivate managers and employees,

3. To justify costs or calculate reimbursement,

4. To measure income and assets for reporting to external parties

The correct answer is E.