Expenses

 

Except direct material cost and direct labour cost, all other expenses (including indirect material and indirect labour cost) which incurred in the factory are known as expenses.

Direct Expense sand Indirect Expenses

Type of Expenses:  Expenses divided into two type:

1. Direct expenses and
2. Indirect expenses

Direct Expenses:

Direct expenses are incurred on a specific job and can be charged directly to a product.

Example of Direct expenses: 

Cost of Dies, tools, fixtures, templates, special purpose machine to complete a particular order.

Indirect Expenses:

Indirect expenses are incurred to operate whole business not on a specific job so it cannot be charged directly to a product. These are ongoing operational cost and charged as overhead of the business.

Example of Indirect expenses: 

Advertising, employee salaries, utilities, rent of building, insurance premium, depreciation, Telephone bill.

Type of Indirect Expenses:

Indirect expenses are charged as overhead and can be further classified as below:

1. Factory expanses
2. Office & Administration expanses
3. Selling expenses and  
4. Distribution expenses 

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Milan Tomic

Hi. I’m Designer of Blog Magic. I’m CEO/Founder of ThemeXpose. I’m Creative Art Director, Web Designer, UI/UX Designer, Interaction Designer, Industrial Designer, Web Developer, Business Enthusiast, StartUp Enthusiast, Speaker, Writer and Photographer. Inspired to make things looks better.

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