[sathyafeb]

Can you please explain about Direct cost, indirect cost, Fixed cost and variable cost, by giving some examples. Please make atable for that.

Thank u

[So123]

DIRECT COST:- A cost that can be directly traced to producing specific goods or services

INDIRECT COST:- A costs that are not directly accountable to a particular function or product these are fixed costs. Indirect costs include taxes, administration, personnel and security costs.

For example, if a company produces artisan furniture, the cost of the wood and the cost of the craftsperson are direct costs—they are clearly traceable to the production department and to each item produced—no allocation was needed. On the other hand, the rent of the building that houses the production area, warehouse, and office is not a direct cost of either the production department or the items produced. The rent is an indirect cost

FIXED COST:- A cost that does not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense.

VARIABLE COST:- A cost of labor, material or overhead that changes according to the change in the volume of production units.