Direct Cost are those costs that can be directly assigned to a production process. Indirect cost were those costs that cannot be directly assigned to production process but have to allocate to production. Variable costs are those costs that vary directly with the production level. Only Direct cost could be variable . But not all direct cost are variable. Thus direct cost contains both Variable and Fixed elements while indirect costs contains only fixed element.
i think that's false, direct costs not variable costs, this was one of my test questions. hope that helps
Yes generally direct costs are variable costs but there may be some direct costs which can be fixed costs as well.
All variable costs are those costs which vary with the variation in the volume of production as well as direct costs are those costs which are directly attributable to any specific unit of product so it may be accepted that all direct costs are variable costs but fixed costs may also be direct cost.
Direct Cost are those costs that can be directly assigned to a production process. Indirect cost were those costs that cannot be directly assigned to production process but have to allocate to production. Variable costs are those costs that vary directly with the production level. Only Direct cost could be variable . But not all direct cost are variable. Thus direct cost contains both Variable and Fixed elements while indirect costs contains only fixed element.
If direct labor don't change with number of units product then it is fixed cost but if it changes with the change in production units then it Is variable cost.
An example of semi variable direct costs is wages. Since semi variable costs are partially fixed and variable, regular labor is fixed costs, as production rises and workers have overtime the overtime is considered the variable cost.
If direct material and direct labor remains fixed irrespective of production volume then these are fixed costs otherwise these are variable costs and normally these are variable costs because it varies with the production volume.
B. Direct materials, direct labor, and variable manufacturing overhead.
They are costs that involve an element of both fixed and variable costs eg a telephone bill involves line rental (fixed) plus cost for calls made (variable)
Yes direct cost may be a fixed or variable cost or both.
They are costs that involve an element of both fixed and variable costs eg a telephone bill involves line rental (fixed) plus cost for calls made (variable)
yes direct as well as variable costs can be identified with products easily as with change in production level these costs also changed.
Average total cost is the average of all your costs. This is your Fixed Costs and your Variable costs. Average Variable Cost is the average of your costs that can fluctuate.