The cost which is directly associated with specific cost object such as product,

Question

The cost which is directly associated with specific cost object such as product, material etc is known as direct cost. It is easily traceable. It includes direct labor, direct material, direct expenses. For eg: in my hardware course when i was assembling the computer the direct cost was reffered to parts i have bought like cost of RAM, Keyborad etc.

The cost which is not associated with specific cost object , but they benefit multiple cost object is called indirect costs. It includes indirect expenses, indirect labor. For eg: at that time i have paid some extra money to shopkeeper to assemble some computer parts because i was not able to assemble them. Another example of indirect costs is i have paid some percentage of GST tax.

Explanation / Answer

What is the difference between direct and indirect costs? Provide examples from either your course project or a project you have worked on.

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