What is the difference between direct expenses and indirect expensesWhat is the difference in direct income and indirect income. Explain with example.

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Direct Expenses are those expenses which are incurred in relation to manufacture of products directly Eg: Machinery repairs, Labour, Factory etc.
Indirect Expenses are those expenses which are incurred after manufacturing of goods. Eg: Administrative Exp, Advertisement, Selling & Distribution etc.

Direct expenses are those expences which is directly related to product.Ex: Machinery repairs, Machinery transport charges . In direct expenses are those which are indirectly related to product.Ex: lighting, power.


  • May 20th, 2009

Already 1 member has answered this question in Manufacturing way.  But, my answer is:-

If a trader imports some products and sells the same as is where is condition, the direct expenses will be freight (ocean/air), customs duty, etc expenses incurred by him before he receives the goods to his godown/warehouse for resale/reexport, is called direct expenses.  After he receives the goods and he may spends for selling the goods is called indriect expenses: like: warehouse/godown rent, electricity, wages etc.

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