hi, what is the definition of direct and indirect cost? please define in plain words. i dont understand the definition found in the bpp book.if possible, please explain with examples. Thanks in advance.
Well direct costs are those which are directly involved in making of a product e.g for if we are manufacturng a chair. we will buy wood it will be direct cost which we will pay in buying that wood and e.g indirect cost will be that which is not directly involved in making a product e.g if we use a vehicle for delivery of those chair so fuel cost will be indirect cost because it is not directly involved in making a product.did it help or need more explanation?
thanks. your answer is very clear and concise.thanks again.
are you like beginning MA2??
yeah. just one week.
mehedi my pleasure dude
Nice explanation. And what about the overheads?
overheads are ongoing expenses of operating a business.There are two types of overhead i fixed overhead ii variable overhead.fixed overheads remain fix and does not chnge e.g rent of the building.and variable overhead include telephone bill because telpehone bill depends on call u make.
I am a bit confused about basic and premium of overtime when it is about idle time. Can u help me plz!
can someone help me about the difference between absorption and marginal costing.
basic pay is the monthly salary
premium is the additional amount if you had worked an overtime eg your rate is 100 then overtime per hour is 50 so thats the premium
idle time is let me say you are working in factory then you had a breakdown of your machine from the the time you stopped working until you start again you were idle that the idle paytime .sorry i cant explain but hope you will get something
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