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Direct material is variable cost because to produce any unit of product direct material required which changes with change in production level.
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Is direct material and labor a fixed 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.
Are all direct cost are variable?
Yes generally direct costs are variable costs but there may be some direct costs which can be fixed costs as well.
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)
Can direct costs display a fixed or variable behavior pattern?
Yes direct cost may be a fixed or variable cost or both.
What are fixed direct costs?
Direct cost are cost which can be directly related to or identified with a particular product or department e.g materials used to make a product, but they could be fixed . Example if their are three computer production lines a special machine is required needed for only one of the computer. i
What are prime cost?
Prime Costs: Prime costs are those costs which are prime importance for making any product and include: Prime Cost = Direct Material + Direct Labor
Is direct material and labor a fixed 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.
Are all direct cost are variable?
Yes generally direct costs are variable costs but there may be some direct costs which can be fixed costs as well.
What are some examples of committed fixed costs?
leasing costs, committed costs are fixed costs that are caused by the possession of facilities, materials, etc.
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 definition of prime cost?
The prime cost of a product is the direct cost which includes the materials and labor needed. This does not include the fixed costs attached to the material.
Can direct costs display a fixed or variable behavior pattern?
Yes direct cost may be a fixed or variable cost or both.
What are a business firm's fixed and variable costs of production?
Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
What are fixed direct costs?
Direct cost are cost which can be directly related to or identified with a particular product or department e.g materials used to make a product, but they could be fixed . Example if their are three computer production lines a special machine is required needed for only one of the computer. i
Examples of semi variable direct costs?
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.
Is it true that all direct costs are variable costs?
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.
What are variable direct costs?
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)
