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.
Three Costs included in every product is:1 - Direct Material Cost2 - Direct Labour Cost3 - Factory OverheadsAlso Can be categorized as follows:Prime Cost = Direct material + Direct LabourConversion Cost = Direct Labour + Factory overheads
Direct Margin is the ratio of (Sales - direct costs)/Sales or (Sales - direct material - direct labour)/Sales
Direct material cost is that cost of material which is used to manufacture goods like wood for furniture etc.
Direct material is variable cost because to produce any unit of product direct material required which changes with change in production level.
Conversion cost is total of: Options Direct material and direct wages Direct material, direct wages, and production overheads Direct wages and production overheads. None of the above
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.
direct material manufacturing cost is that raw material cost which is used to manufacture goods like wood in furniture.
direct material manufacturing cost is that raw material cost which is used to manufacture goods like wood in furniture.
Three Costs included in every product is:1 - Direct Material Cost2 - Direct Labour Cost3 - Factory OverheadsAlso Can be categorized as follows:Prime Cost = Direct material + Direct LabourConversion Cost = Direct Labour + Factory overheads
Direct Margin is the ratio of (Sales - direct costs)/Sales or (Sales - direct material - direct labour)/Sales
Direct material cost is that cost of material which is used to manufacture goods like wood for furniture etc.
Direct material is variable cost because to produce any unit of product direct material required which changes with change in production level.
Sales commission has no relationship with manufacturing of products that’s why it is not a direct cost as direct costs are those costs which related to manufacturing of products like raw material, labor etc.
Direct Costs: These are those costs which are necessary for the production of the goods and without which it is not possible to make the product. Like Direct Materials, Direct Labor. Example: In the process of making shoe leather is called the direct material which is necessary to make shoe and the cost of this leather is direct cost to the product of shoe.
prime costs only includes direct cost like direct material and direct labor.
Prime Costs: Prime costs are those costs which are prime importance for making any product and include: Prime Cost = Direct Material + Direct Labor