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Describe the various types of cost in manufacturing accounts.

Describe the various types of cost in manufacturing accounts.

Answers

Simon
The costs incurred in the manufacture are classified into two.
1) Direct costs/prime costs. These are costs that one can easily associate with the product or one can easily identify in the product. They include
• Direct materials. These are the costs of raw materials that one can directly identify in product.
• Direct expenses. These are the costs which are directly experienced in the process of manufacture of a product.
• Direct labor. These are costs of labor associated with a product.
2) Indirect costs overhead. These are costs which cannot be easily identified in a product or associated with it. They include
• Indirect expenses. These are expenses which cannot be directly associated with the product. For example rent, water, power etc.
• Indirect labor. These are labor costs which cannot be easily associated with a product.
• Indirect materials. These are raw materials costs which cannot be easily identified in a product.
skilled writter answered the question on May 3, 2018 at 17:11

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