Which cost also called as indirect cost?

Indirect costs include costs which are frequently referred to as overhead expenses (for example, rent and utilities) and general and administrative expenses (for example, officers’ salaries, accounting department costs and personnel department costs).

What are indirect costs?

Indirect costs represent the expenses of doing business that are not readily identified with a particular grant, contract, project function or activity, but are necessary for the general operation of the organization and the conduct of activities it performs.

What is indirect costs in cost Accounting?

Indirect costs are costs that are not directly accountable to a cost object (such as a particular project, facility, function or product). Indirect costs include administration, personnel and security costs. These are those costs which are not directly related to production.

What are indirect business costs?

Indirect costs are the costs of running a business and going to market with a product or service—regardless of the volume manufactured and/or sold. In other words, they are not directly related to making a product or service, or buying a wholesale product to resell. (This distinguishes them from direct costs.)

Which is an example of an indirect cost?

Examples of indirect costs are: 1 Accounting and legal expenses 2 Administrative salaries 3 Office expenses 4 Rent 5 Security expenses 6 Telephone expenses 7 Utilities More

What are indirect expenses and what are factory overheads?

The indirect expenses (overheads) incurred within the factory area are classified as factory overheads. Administration or Office Overheads The indirect expenses (overheads) incurred within the administrative area are classified as administrative or office overheads.

What does the term indirect mean in accounting?

The term indirect means that which cannot be allocated, but which can be apportioned to or absorbed by cost centers or cost units. All those costs/expenses which are not capable of being attributed directly to a particular product or service or cost center are called indirect costs/expenses.

Which is an example of an overhead cost?

Overhead is the aggregate of indirect material, indirect labor, and indirect expenses. It refers to any cost which is not directly attributable to a cost unit. The term indirect means that which cannot be allocated, but which can be apportioned to or absorbed by cost centers or cost units.

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