Direct and indirect costs, Cost Accounting

Direct and Indirect costs

Recall such direct costs are costs which can be traced particularly to the end product of the production procedure while indirect costs cannot be so traced.

-  Direct costs have of costs such can be directly attributed to an exact product, output or level of activity. Direct costs include direct raw materials and direct labour named as prime costs also in aggregate. 

"PRIME COST = Direct Material Cost + Direct Labour Cost"

-  Indirect costs are costs such will not be directly attributable to a exact product. They are regarded like overheads. Identification of overheads to exact products is done by cost apportionment and allocation. They involve supervisors' rent, salaries, electricity, and depreciation of building.

Posted Date: 2/5/2013 3:08:20 AM | Location : United States







Related Discussions:- Direct and indirect costs, Assignment Help, Ask Question on Direct and indirect costs, Get Answer, Expert's Help, Direct and indirect costs Discussions

Write discussion on Direct and indirect costs
Your posts are moderated
Related Questions
Your client has asked you to evaluate an investment project for her using what you have learned in school regarding the net present value method. The project will run for eight yea

Describe the ways in which the needs of internal and external users of accounting information are the same and different.

o locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following three options for its retail store rentals: 1. paying

Bickering Ltd Income Statement for the year ended 30 June 2012   Sales (credit)                                                                           636,10

Assume new instruments for a firm cost $18,000 with an additional installation fee of $2,000, both of which are depreciable. Finish the depreciation schedule shown below using the

Example of Flexible and Fixed Budget A company has budgeted to produce and sell 100,000 units of cakes throughout the next period. The selling price per cake is Sh. 20 and var

Compute the rate to be used in each department for applying overhead in both departments Budegeted Cost sheet   Amount in $

This is difficult to perceive cash maintained in the vault as an investment. Fairly, you would be thinking that if we invest cash, then how can cash itself be an investment? Howeve

WORKED EXAMPLES OF EXPECTED CASH COLLECTIONS PATTERNS

The book of Deven Verma could not be tallied. The account transferred the difference of Rs. 1.270 in the suspense account on the debit side. the following mistakes were found later