Indirect Labor & Indirect Expenses

Practice Exam FORM 3, Question #40 asks for projections included in a profit plan and has both Indirect Expenses and Indirect Labor as correct answers.
My understanding is that indirect expenses, typically, include indirect labor; as shown on Table 7.1 of the AHPP (Page 420).

Can someone please confirm it?
Thank you!


@coachdarionziegler are you able to help with this question?

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Hi @ignaciochoza ,

Yes, you are exactly correct! Total indirect expenses include indirect labor.
Sometimes the labor is shown broken out separately like on page 424 of the AHPP and other times they are shown as a total like the chart on page 412 of the AHPP.

Both would be accounted for on a profit plan, although like you are suggesting indirect labor might be listed under the heading of indirect expenses like on page 420.

Hope this helps!

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Great. Thank you!

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