Direct Cost And Indirect Cost

Variable manufacturing costs per unit Variable nonmanufacturing costs per unit Fixed manufacturing costs per unit

Unit Direct Labor (Basic) = DL Std. Qty. Per Unit x DL Std. Rate Per Hr.

3. If a cost is identical under each alternative under consideration within a given decision context, the cost is considered:

Direct labor assembly costs are, by their nature, directly traceable to individual products. Therefore the relevant cost driver for this cost is the number of Direct Assembly Labor Hours. The other 21 cost categories are indirect costs.

However, IRC § 263A(a) provides that direct costs and indirect costs that are properly allocable to the product must be included in inventory and thus, must be capitalized.

As defined by the OMB (2004), “Indirect costs are those incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved” (p. 11). The costs in question include international conference, employee recreational activities and counseling services, investment counsel, lobbying, depreciation, and insurance. Despite seemingly

Inherently, in all businesses there is overhead costs or non-direct costs. If management wants to know the true cost

According to this method, every unit of the product is assigned all direct, fixed, and variable costs. This method includes the cost of direct materials and labor as well as a portion of the overhead costs associated with it in the final costing of every unit of the product.

Cost of 401’s – we have 3,000 in inventory so 3,000 x 0.4 = 1,200

unit, two types of costs are distinguished. Firstly the direct costs, consisting of the direct

Which terms would make the following sentence true? Manufacturing companies that benefit the most from activity-based costing are those where overhead costs are a _________ percentage of total product cost and where there is ___________ diversity among the various products that they produce.

* Direct costs are those costs that are necessary to convert raw materials into the whiskey that goes into the aging barrels.

A direct cost can be traced to a product or service which includes: Direct labor- which is the cost of the labor that’s directly connected to a product or services. Direct labor is sometimes called touch labor, since direct labor workers typically touch the product while it is being made.( Ray H. Garrison, Eric W. Noreen and Peter C. Brewer p 39-40) An example of direct labor is an assembly line worker. Labor cost that cannot be physically traced to the creation of products, or that can be traced only at great cost and inconvenience, are considered to be indirect labot.( Ray H. Garrison, Eric W. Noreen and Peter C. Brewer p 40) Direct material are those materials that become an integral part of the finished product and whose cost can be traced to the finished product.( Ray H. Garrison, Eric W. Noreen and Peter C. Brewer p39-40) Manufacturing overhead is the third element so manufacturing cost, it includes all costs of manufacturing except direct materials and direct labor. Manufacturing overhead includes items such as indirect materials; indirect labor; maintenance and repairs on production equipment; and heat and light, property taxes, depreciation, and insurance on manufacturing facilities. Only cost associated with operating the factory are consider to be manufacturing overhead cost. A company also incurs other costs associated with its selling administive functions, but these costs are not included as part of manufacturing overhead. Only those

In general, cost means the amount of expenditure (actual or notional) incurred on, or attributable to a given thing.

Direct costs are costs directly related to producing the products and services of a project. On the other hand, indirect costs are costs not directly related to a project’s products or services, but are indirectly related to performing the project.