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Answer Posted / subhash sawant
Indirect expenses are those expenses which are incurred
after the manufacturing of goods.
to understand indirect expenses we should first understand
direct expenses. direct expenses are those which are
incurred in relation to the manufacturing of a product
directly. For Ex. labour,factory expenses, machinery
repairs etc.
So, indirect expenses will be like,selling and distribution
expenses,all the administrative expenses,carriage
outwards,advertisment expenses because they are related
indirectly with the product manufacturing and sales.
Example:
A product is manufactured in the factory where lighting
charges are 50per unit, labour 30/unit. there after
traportation charges outside factory are 20/unit.
salaries paid(administration):20000
advertisment:15000
so, here, lighting and labour will be direct exp. and
transportation outside factory, salary(adms.) and adv. exp.
will be indirect
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