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A difficult problem in calculating the total costs and expenses of a department is?
Assigning indirect expenses to the department
Why distinguish direct costs from indirect costs?
It is done so to keep control on costs as direct costs are controllable while indirect costs are not.
What costs other than direct materials costs and direct labor costs incurred in the manufacturing process are classified as?
Indirect costs(salaries, materials not directly involved in manufacturing), period costs(selling and admin costs)
What is the relationship between direct and indirect costs?
Direct costs: Those costs that are linkedto a specific cost objective like product/service. Indirect costs: Those costs that CANNOT be directly linked to a particular cost objective and incurred for multiple cost objectives. Can also be called Common Cost.
Why do managers consider direct costs to be more accurate then indirect costs?
Answer this question...why do managers cosider direct costs to be more accurate than indirect costs?
What is the process of assigning indirect costs?
Cost allocation...
A difficult problem in calculating the total costs and expenses of a department is?
Assigning indirect expenses to the department
Why distinguish direct costs from indirect costs?
It is done so to keep control on costs as direct costs are controllable while indirect costs are not.
What costs other than direct materials costs and direct labor costs incurred in the manufacturing process are classified as?
Indirect costs(salaries, materials not directly involved in manufacturing), period costs(selling and admin costs)
What is the relationship between direct and indirect costs?
Direct costs: Those costs that are linkedto a specific cost objective like product/service. Indirect costs: Those costs that CANNOT be directly linked to a particular cost objective and incurred for multiple cost objectives. Can also be called Common Cost.
Why do managers consider direct costs to be more accurate then indirect costs?
Answer this question...why do managers cosider direct costs to be more accurate than indirect costs?
Is direct cost same to indirect cost?
No direct costs and indirect costs are not same and opposite of each other.
what are factor that affecting the classification of a cost as direct or indirect?
The classification of a cost as direct or indirect depends on a variety of factors. Traceability: The most important factor in determining whether a cost is considered direct or indirect is the ability to trace it to the production process. Direct costs are those which can be directly traced to the production of goods or services, while indirect costs are those which cannot be traced in this way. Timing: The timing of the cost can also be a factor in determining whether it is classified as direct or indirect. Costs which are incurred before production begins are generally classified as indirect, while those incurred during the production process are typically direct. Relationship to Production Process: The relationship of the cost to the production process can also be a factor in determining whether it is considered direct or indirect. Direct costs are those which are related to the materials or labor used in the production process, while indirect costs are those which are necessary but not directly related to the production process. Controllability: Another factor in the classification of a cost as direct or indirect is the degree of control that the company has over the cost. Direct costs are those which are controllable by the company, while indirect costs are those which are uncontrollable and fixed. Flexibility: The flexibility of the cost can also be a factor in determining whether it is classified as direct or indirect. Direct costs are those which can be adjusted in response to changes in production, while indirect costs are those which remain fixed regardless of changes in production.
What does the term 'process costing' refer to?
The term "process costing" refers to the accounting method that takes into accounts all costs, either direct or indirect, during the manufacturing process of a product.
Are all costs variable?
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.
What are the direct and indirect costs of a work comp claim?
A direct cost example is the medical expense claim, and an example of an indirect cost is the lost productivity of the injured employee AND the staff who has to process the claim.
What are the stages of accounting for costs?
direct costs,indirect costs,sunk costs, Activity based costing.
