![]() ![]() ![]() Expenses:ĬIMA defines expenses as “the cost of services provided to an undertaking and the notional cost of the use of owned assets.” It may be classified into direct expenses and indirect expenses. It may be incurred in the factory, office, and selling and distribution divisions. A few examples indirect labour costs are wages of storekeeper, salaries of office staff and salesmen, directors’ fees, etc. Indirect labour cost cannot be practically traced to specific units of output. It is employed to carry out tasks incidental to goods produced or services rendered. CIMA defines labour cost as “the cost of remuneration (wages, salaries, commission, bonus, etc.) of the employees of an undertaking.” Direct labour cost can be conveniently and specifically charged to specific products. Labour, which plays an active and direct part in the production of a particular product, is termed as direct labour. It may be classified into direct labour and indirect labour. Human effort required to convert materials into finished products is termed as labour. ![]() Indirect material may be used at the factory, office or selling and distribution divisions. ![]() A few examples are consumable stores, oil and waste, printing and stationery material, and etc. Indirect Material:Īll material, which is used for secondary purposes and cannot be allocated conveniently to specified physical units, is called as indirect material. It is also called as process material or production material. Some of the examples are all material components or spare parts specifically purchased, produced or supplied from stores, primary packing materials, and purchased or partly produced components. ![]()
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