- This topic has 3 replies, 2 voices, and was last updated 4 years ago by
.
Viewing 4 posts - 1 through 4 (of 4 total)
- Posts
As we know that any direct material which has insignificant value is considered indirect.
So other way round, if any indirect material with a significant value is considered direct?Like if Oil used in lubricating and greasing production machinery is expensive.
But none of the lubricating oil ends up in the product so it will be indirect.
The idea of treating material of insignificant value as indirect is simply an accounting convenience. If you were making furniture and as a final stage applying polish I don’t think it’s worth the effort working out how many milligrams are applied to each piece of production.
Viewing 4 posts - 1 through 4 (of 4 total)
- The topic ‘Costing’ is closed to new replies.