15 April 2014
yes these are production overheads, but here u asked whether they are direct or indirect. so these are indirect expenses, as these don't vary according to volume of production. i think you must read cost accounting std A-21 for guideline note
16 April 2014
ya your logic is correct, but see as you cant apply oil etc as per your requirement, you have to overhauling as per specified time or units generated. one more thing we are talking about what is defined in guidelines etc, so direct expenses which are allocable to cost of unit are direct material, direct labor, power & water for running machinery and direct freight.
19 April 2014
Dear Shivani ji, as i said above your logic is right, but we are talking about what is defined in books and practice. as per this direct costs elements are marked (as i told above) and rest are indirect. if we take your logic, as per this repair and maintenance also can be consider as direct cost, as some parts of machines are replaceable after a certain production like inserts, dyes etc. but it cant held as direct cost.
CAclubindia
