Direct expense or indirect expenes

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RAJA P M (Querist)

24 December 2016 Dear Experts.,

All of you Good Evening...

Please clarify my question for the Knowledge improvement...

How to Define or Choose the Expenses for "Direct or Indirect"...?
Which based it is considered expenses...?
Any Laws or Guideline to these choose...

Thanks & Regards

P.M.RAJA

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

25 December 2016 Expenses pertains to manufacture such as factory rent, wages, stock insurance, freight, carriage, power and fuel used for production can be considered as direct cost for that activity.

Indirect expenses are supportive activity which is not add value to cost of production. Such as marketing cost, administration cost, salaries etc

RAJA P M

RAJA P M (Querist)

25 December 2016 Thank You SIR.,

If the Firm is Trading Business.
1. How to the expenses will be decided...?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

25 December 2016 For trading freight and carry forward will be direct, other than that every thing will be indirect.

Message likes : 1 times

RAJA P M

RAJA P M (Querist)

26 December 2016 Thank You Sir.,
I Like your answer...

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