Question

difference between direct and indirect expenses with examples​

Answer 1

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$\begin{tabular}{p{2cm}|p{4cm}|p{5cm}} \textbf{\textsf{Basis for Comparison}} & \textbf{\textsf{Direct Expenses}} & \textbf{\textsf{Indirect Expenses}}\\ \cline{1-3} \sf 1) D{e}finition &\sf Direct expenses are those expenses that are paid only for the business part of your home. &\sf Indirect expenses are those expenses that are paid for keeping up and running your entire home. \\ \\ \sf 2) Incurrence & \sf Production or purchase of goods. &\sf Office and Administration. \\\\ \sf 3) Appears in &\sf Debit side of the trading account. &\sf Debit side of profit and loss account. \end{tabular}$

$\begin{array}{c|c|c} {\left( 4 \right) \sf \: \: {Cost \: of \: \atop{goods \: sold \: }}} & {\sf {It \: is \: incl{u}ded \: in \: the \: \atop{cost \: of \: goods \: sold.}}} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: & {\sf {It \: is \: not \: incl{u}ded \: in \: the \: \atop{cost \: of \: goods \: sold.}}} \end{array}$

$\begin{tabular}{p{2cm}|p{4cm}|p{5cm}} \sf 5) Allocation or Apportionment & \sf Directly allocated to the particular cost unit. & \sf Directly apportioned on a suitable basis. \\ \\ \sf 6) Treatment & \sf Forms part of prime cost. & \sf Treated as over heads.\\ \\ \sf 7) Example & \sf If you pay for painting or repairs only in the area used for business. & \sf Insurance, Utilities and general home repair \end{tabular}$

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Answer 2

Answer:

when we produce goods we have to bear many type of experience. these exp are dividend into two main categories, direct and indirect.

now look all those exp which are paid to made a product ready( like raw material,,factory rent,factory power,labour,wages, wages&salary,carriage inward, repair etc)are

direct exp.

it's not only about to make a product ready. now we have to sell it. so all those exp which we paid to sell our products ( like salaries, salary & wages, commissions, office rent, office power Bill's,carriage outward, etc) are indirect exp. This is also called administering exp or office exp.

Note----

wages & salaries is a direct exp and

salaries &wages is a indirect exp.