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Hi Mr John…I came across expense in one question regarding cost classification….How should I understand this ?Is this overhead? Direct cost? Indirect cost?…….Thank you….
It depends what sort of expense it is.
If it is an expense on materials for making the product then it is a direct expense.
If it is an expense on (for example) electricity for lighting the factory, then it is an indirect cost (i.e. an overhead).Are you watching the free lectures (with the lecture notes in front of you)? They go through everything you need to be able to pass F2, and there is a chapter covering cost classification and behaviour where I go through examples.
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