Direct cost and indirect cost

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 April 2014 can anybody tell me whats the difference b/w DIRECT COST AND INDIRECT COST in mfg unit and in trading unit

Santosh Kalburgi

Santosh Kalburgi (Expert)
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27 April 2014 Direct cost is that cost which can be easily identified to a particular product/service. Its percentage would be high.
Indirect costs on the other hand are those costs which cannot be conveniently attributed one particular product.
For example:
to manufacture a gold ring and a chain the gold, the labour charges are direct costs. whereas the polishing or cleaning agent/chemical is an indirect expense which cannot be exactly ascertained with a particular product.

Regards,
Santosh G Kalburgi
Cost Accountant
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