Classification Of Costs – Direct and Indirect Costs

Direct and indirect costs are two more costs which are involved in running a business.  Direct costs are those costs directly associated with the manufacturing or production of a product.  This includes labor that is directly related to making the product and purchased materials which are directly related to making the product. Engineering costs can be applied directly to a product so they would be included in direct costs.

Indirect labor costs are those costs that cannot directly be related to the production of a specific product.  These would include the basic overhead which is used in the production of all the different products at the company.  Some examples would be rent, wages of supervisors and managers, office staff, electricity and power consumption, repair and maintenance costs and even consumables like gas, oils and lubricants.

In the world of manufacturing a software package which can handle direct and indirect costs is a must and software from MIE Solutions.  This software can help your manufacturing company become more competitive and cost conscious. 

1 Comment

  1. Rodolfo on October 17, 2013 at 5:45 pm

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