Which explanation best summarizes what went wrong during Paul’s cost analysis?


Paul is developing a new automobile. His cost analysis took into consideration the costs of materials, insurance, and labor. Suddenly, unanticipated bills have begun coming in, putting his project far over budget.


He forgot to include direct costs such as advertising, legal fees, and repairs.


He forgot to include circumstances such as employee vacations and faulty materials.


He forgot to include indirect costs such as advertising, legal fees, and repairs.


He forgot to include circumstances such as attrition and failure of delivery of materials