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A direct cost is a cost than can be attributed directly to a product; examples include materials used in production, electricity used by a machine making the product, worker hours spend operating the machine to make the product.
An indirect cost is a cost than occurs but cannot be attributed directly to a product; examples include electricity used by lighting, the account staff wages, business rates.
indirect costs, like direct costs can be both fixed and variable: business rates are fixed (for a year) but the cost of electricity used to light the factory floor is going to be variable depending upon how much the machines are used and staff being present - there can also be more than one product being made on the factory floor on different machines, but only one set of lights over the whole floor - one light could easily cover 2, 3 or more machines.
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Difference between direct cost and indirect cost?
direct cost has direct relation with product manufacturing while indirect cost not and not identifiable with cost as well.
Can direct cost be indirect cost?
The Answer is NO. Direct costs are direct cost which can be clearly/economicaly identified with the cost object, indirect costs cannot be traced to a specific cost object, based on the definition direct cos cant be an indirect cost (Misdhaaque Ahmed)
Prime cost and conversion cost?
Prime cost = direct materials + direct laborwhile conversion cost = direct labor + factory overhead( which includes indirect materials, indirect labor and other indirect costs
What are the differences between direct cost and indirect cost in management accounting.?
what are the differences between direct cost and indirect cost in financial accounting
Can cost function measure direct cost as well as indirect cost?
yes cost function measures the direct costs along with indirect cost.
Is advertising expense direct or indirect cost?
indirect
Is direct cost same to indirect cost?
No direct costs and indirect costs are not same and opposite of each other.
Define direct and indirect labor cost in garment industry?
Define direct and indirect labour?"
Is direct material a selling cost?
is direct cost a? Selling cost, manufacturing costs, direct, manufacturing cost indirect, general and administrative cost, fixed cost , variable cost, is direct cost a? Selling cost, manufacturing costs, direct, manufacturing cost indirect, general and administrative cost, fixed cost , variable cost,
Variable cost can always be traced directly to the cost object?
No, because varible cost can be direct or indirect cost. Direct cost can always be traced directly to a cost object, but not indirect cost. For example, sales commission.
Flour for baking bread are direct or indirect cost?
They are direct costs.
Direct costing as a technique of costing?
direct costing is a technique in which costs are classified as direct cost or indirect cost.
