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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.
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∙ 16y ago
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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.
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.
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.
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 and controlled cost the same?
No direct cost and controlled costs are both separate costs.
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.
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.
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.
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?
Total costs less conversion costs equal to material costs?
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
Is direct cost and controlled cost the same?
No direct cost and controlled costs are both separate costs.
Costs can either be prime costs or conversion costs but not both?
direct labor
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)
Are indirect or direct costs easier to allocate?
If you're referring to income taxes, direct costs are easier to allocate.
Is direct cost same to indirect cost?
No direct costs and indirect costs are not same and opposite of each other.
What are the stages of accounting for costs?
direct costs,indirect costs,sunk costs, Activity based costing.
Direct cost of sales?
Direct cost of sales are those costs that exists as a result of selling the product. Indirect costs are costs that are there whether the product sells or not.
