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What is the difference between Direct expenses and Indirect
expenses?
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Answer Posted / kannan
Direct Expenses:
Expenses connected with purchases of goods are known as
direct expenses. For example, freight, insurance, of goods
in transit, carriage, wages, custom duty, import duty,
octroi duty etc. Without incurring these expenses, it is
not possible to bring the goods from the purchase point to
the godown of the business. such expenses are collectively
known as direct expenses.
Indirect Expenses:
All expenses other than direct expenses are assumed as
indirect expenses. Such expenses have no relationship with
purchase of goods. Examples of direct expenses include rent
of building, salaries to employees, legal charges,
insurance of building, depreciation, printing charges etc.
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