Question

What do you mean by indirect expenses? (Answer in one sentence)

Answer 1

Indirect expenses are the expenses that a business incurs that are associated with operating the business as a whole

Answer 2

Answer:

Indirect expenses are the expenses that do not relate to production cost. Instead these are the expenses that are done after production.

Explanation:

Indirect expenses are the expenses that do not relate to production cost. Instead these are the expenses that are done after production.

Indirect tax is on goods and services, Customs duty on imports and exports, which purely depend on the purchases made and is paid by the traders and service provider frequently, monthly, quarterly etc. And is purely on the value of the goods and services provided.

For example, lubrication oil to run a machine that produces parts cannot be traced directly to each part produced, but it is an expense of producing that part. It is an indirect expense, because the best you can do is accrue it to each part produced over a time period, as overhead.

All expenses like stationary, staff welfare, telephone expenses, rent, salaries, etc. are indirect expenses.