Indirect material is normal fixed cost that is why it is allocated using some kind of ratio or formula.
Indirect
Indirect material is normal fixed cost that is why it is allocated using some kind of ratio or formula.
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.
Overhead refers to the cost of a business in a particular period. Specifically, overhead points to fixed and indirect costs. They are non-labor costs. Non-labor costs are variable or fixed. Rent and salaries are examples of fixed costs. Advertising and supplies are variable costs.
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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.
Indirect
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.
raw material cost variable cost because it change with volume of product i.e. the more you produce the more you have to purchase for raw material. Fixed cost are never change with changing in volume.Raw Material Cost is variable cost
eg:- rent of tlephone line is fixed. But chatges for the calls will be according to the number of calls you made.
All fixed operating expenses from overhead (indirect) departments
Generally variable costs are relevant costs but if due to any decision fixed costs are also going to affected then fixed costs are also relevant costs.