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+--- Thread: indirect cost (/thread-indirect-cost)
indirect cost - tango_acc - 07-30-2009
hi,
as i know direct cost = variable cost.
1) may i know indirect cost = fixed cost?
2) if indirect cost not 100% is fixed cost, may i know what other thing can be considered as indirect cost?
thanks
rgds
- Odyssee - 07-30-2009
Indirect costs are costs that are not directly accountable to a particular function or product. Indirect costs may be either fixed or variable. Indirect costs include taxes, administration, personnel and security costs, and are also known as overhead.
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.
It is possible to justify the handling of almost any kind of cost as either direct or indirect. Labor costs, for example, can be indirect, as in the case of maintenance personnel and executive officers; or they can be direct, as in the case of project staff members. Similarly, materials such as miscellaneous supplies purchased in bulk -- pencils, pens, paper -- are typically handled as indirect costs, while materials required for specific projects are charged as direct costs.
Costs either charged directly or allocated indirectly
* Telephone charges
* Computer use
* Project clerical personnel
* Postage and printing
* Miscellaneous office supplies
Costs usually allocated indirectly
* Utilities
* Rent
* Audit and legal
* Administrative staff
* Equipment rental
(Source http//en.wikipedia.org/wiki/Indirect_costs)
- shahid amin - 08-26-2009
Indirect costs are costs that are not directly accountable to a cost object (such as a particular function or product). Indirect costs may be either fixed or variable. Indirect costs include taxes, administration, personnel and security costs, and are also known as overhead.
Difference between Direct and Indirect Cost
Direct costs are those cost which can be directly identified as coming from a certain operation. In addition, direct cost usually represents a major cost of the company.
An example of direct cost in a manufacturing company is the cost of materials used and the cost of labor.
An example of indirect cost in a manufacturing company is the factory overhead.
For a merchandising company, direct cost would be the cost of goods sold.
For a service company, direct cost would be the cost of services.
where as indirect costs are not included in cost of goods sold or cost of goods services.
- tariq aziz - 09-03-2009
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by tango_acc</i>
<br />hi,
as i know direct cost = variable cost.
1) may i know indirect cost = fixed cost?
2) if indirect cost not 100% is fixed cost, may i know what other thing can be considered as indirect cost?
thanks
rgds
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
direct cost may be variable and fixed so the case with indirect cost