Question { IBM, 192621 }

What is the difference between Direct expenses and Indirect
expenses?

Answer

Expenses Which are connected to purchase of goods or Service
are known as "Direct Expenses"
For example, freight, insurance, of goods in transit,
carriage, wages, custom duty, import duty, octroi duty etc.
Without incurring these expenses, it is not possible to
bring the goods from the purchase point to the godown of the
business. such expenses are collectively known as direct
expenses.
Where as Indirect Expenses,
All expenses other than direct expenses are assumed as
indirect expenses. Such expenses have no relationship with
purchase of goods. Examples of indirect expenses include
rent of building, salaries to employees, legal charges,
insurance of building, depreciation, printing charges etc