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What is the difference between Direct expenses and Indirect
expenses?
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Answer Posted / sunil ranjan samantaray
Direct expenditures are those which are mostly incurred within the factory or industry and it is much more essential for a company than indirect expenditure. Because it shows a complete picture of operation of a business unit. Most of the investors keep their eyes on operating profit or gross profit than net profit. Because the expenditure incurred under direct expenditure is most essential , if a company will be able to make control on direct expenditure then company can easily handle their operating expenses. It reflects the operational performance of the company. Examples of Direct expenditure are wages,purchases of raw material,octroi,coal,gas,water etc. Examples of Indirect expenditure are rent,taxes,depreciation,salary etc.
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