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On the other hand, direct costs represent labor, materials, equipment, and sometimes subcontractors. They are assigned directly to a work package and activity. When project durations are imposed, such as in the racing sailboat project, direct costs may no longer represent low-cost, efficient methods. As detailed in the crash cost list, costs for the imposed duration date will be higher than for a project duration developed from ideal normal times for

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.

Production costs are costs associated with manufacturing goods or providing services and are classified as direct materials, direct labor, and overhead.

Indirect Costs are those you can’t clue to anniversary job, but you can clue to anniversary department, annual or artefact band you are producing. Computation of the Gross Allowance and Addition Allowance are two of a lot of important numbers you charge to actuate for planning, barometer and managing your business.

Variable costs: Costs that vary with the quantity produced or sold e.g. costs of materials and wages

Explicit cost is the revenue coming into to a business minus the costs.For example, a pizza parlor, the cost includes,workers to run the business, ovens to cook the pizza, and ingredients to make the pizza. Accountants usually look at the expenses for a business in this manner the revenue minus the explicit costs.

Indirect cost: which cannot be accurately attributed to the regulation’s effect and linked with another cost object;

For example, if a company produces furniture, the cost of the wood or fabric, the cost of the employee building the furniture and the patent for the design are direct costs. They are clearly visible to the production department and to each item produced.

Direct material cost is the price laid down on items that are used in the fabrication of a product or that are used as service providers. The price caters for the transportation of the items from the manufacturer to the consumer, in-transit cover and the cost of any unforeseen events which may include damages that might occur, substandard work, and overruns. In the direct material cost, the buyer is always supplied with a copy of the contract form which is to be signed after he/she has gone through and is contented with the laid down rules. The same buyer sends a local purchase order to the manufacturer on the goods or items that he/she requires. In relation to other direct costs, the charges are endorsed on specific costs objective(s) such as include special tooling and test equipment, computer services, long distance costs, and telephone costs. Therefore, the buyer is expected to know whether the seller can be accountable in case of any eventuality and the system estimate ("Lesson 5 Analysis of Direct Labor", n.d.).

A .Direct costs - A product, labour and materials costs directly associated with the production costs- direct cost. Other expense, loss or: is considered as indirect costs are more difficult to determine if a particular product and administrative expenses, and the like.

When budgeting for the future as well as estimating costs for production of goods in the present there is a need to assess the prices of the direct inputs. The direct costs are those which are directly incurred as a result of production and can be completely attributed to that production. These costs will include materials, labor and other expenses such as power. The process of costing may appear simple; to calculate the direct costs and then allocate the indirect costs. However, while the concept may appear simple, the practice can be difficult with a number of potential sources of error which may lead to wrong assessments.

i. Direct – costs that can be traced directly to one output. For example, the wood and paint that it takes to make a chair.

Three types of product costs are defined and used within managerial accounting. Direct material is a type of product cost and it can be

4) Materials inventory – consist costs of direct and indirect materials which have not entered the manufacturing process.

There are two classifications of costs associated with construction projects, direct costs and indirect costs. Direct costs include the labor, material and equipment operating costs necessary to put work in place. Indirect costs include supervision, job and home office overhead, profit, financing, and the cost of inflation. Direct costs can be allocated to each activity on the project. Indirect costs, on the other hand, cannot be realistically prorated and assigned to each separate activity.