An indirect cost is any cost not directly identified with a single, final cost objective, but identified with two or more final cost objectives or an intermediate cost objective. It is not subject to treatment as a direct cost.
What is a direct cost vs indirect cost?
If the cost can be identified specifically with a particular cost objective such as a grant, contract, project, function or activity, then it is a direct cost; indirect costs are those costs that cannot be readily assignable to a cost objective.
What is the new word of direct?
What is another word for direct?
| frank | straightforward |
|---|---|
| open | straight |
| blunt | forthright |
| plain | outspoken |
| sincere | explicit |
Which is the best definition of a direct cost?
What Is a Direct Cost? A direct cost is a price that can be directly tied to the production of specific goods or services. A direct cost can be traced to the cost object, which can be a service,…
What is the difference between direct and indirect cost of Labor?
The direct cost of labor includes the cost of wages and benefits for employees who are directly involved in producing the product or service commodity. The indirect cost of labor refers to amounts paid for employees that support the commodity but aren’t directly involved in making it.
When is a rent expense a direct cost?
Rent expense may only be a direct cost if only one cost object relates to the facility being rented. Because direct costs can be specifically traced to a product, direct costs do not need to be allocated to a product, department or other cost object.
Can a direct cost be tied to a specific unit?
Although the electricity expense can be tied to the facility, it can’t be directly tied to a specific unit and is, therefore, classified as indirect. Direct costs do not need to be fixed in nature, as their unit cost may change over time or depending on the quantity being utilized.
