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What is the difference between Direct expenses and Indirect
expenses?
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Answer Posted / pawandeep singh
Direct costs are those for activities or services that
benefit specific projects, e.g., salaries for project staff
and materials required for a particular project. Because
these activities are easily traced to projects, their costs
are usually charged to projects on an item-by-item basis.
Indirect costs are those for activities or services that
benefit more than one project. Their precise benefits to a
specific project are often difficult or impossible to trace.
For example, it may be difficult to determine precisely how
the activities of the director of an organization benefit a
specific project. Indirect costs do not vary substantially
within certain production volumes or other indicators of
activity, and so are considered to be fixed costs.
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