Question { FIC, 198980 }

What is the difference between Direct expenses and Indirect
expenses?

Answer

Direct expense is an expense which is incurred with
manufacture of a product. For Eg: Purchase of raw
materials, factory labour, factory wages, electricity
expense incurred in factory ie., on running machinery,water
etc.

Indirect expense also called as overhead are additional
expenses which are incurred on bringing a product to final
customer.

Eg: Sales and Distribution, Office Salary, expenses on
support services, office electricity, office water,
printing and stationery, outsourcing expenses, advertising
expenses etc.