Define Direct cost and Indirect cost.

Explain Direct cost and Indirect cost.


Direct Cost are all the expenses which can be identified with the individual product, service or job cost centre. In the manufacturing process of products, materials are purchased, labours are hired and wages are paid to them. All these take active and direct part in the manufacturing process.

Indirect Cost are all the expenses which cannot be identified with the individual product, service or job cost centre. The totals of indirect costs are termed as overheads. Example: salaries of storekeepers, foremen, work manager’s salary etc.
Explain fixed, variable and semi-variable costs.
Fixed Cost is the cost which remains constant ...Variable Cost is the cost which varies directly in proportion ...Semi-variable Cost is the cost which is neither fixed nor variable in nature
Explain controllable and uncontrollable costs.
Controllable Cost are the costs which can be influenced by the action...Uncontrollable Cost are the costs which cannot be influenced by the action..
Explain Normal and Abnormal Costs.
Normal Cost are the normal or regular costs which are incurred in the normal conditions…
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