top of page

Cost Accounting

Relationship Costs

Topic Menu
Content Contributors
Christian Bien Portrait_edited.jpg

Priya Kaur

Christian Bien Portrait_edited.jpg

Christian Bien

Learning Objectives

tutorial.png

one.png
Indirect Costs
Slide1.jpeg

Indirect Cost Indirect costs are costs that are used in a manufacturing process or service but cannot be easily traceable to the end product or service. 


Some indirect costs can include: 

  • Glue 

  • Paint 

  • Maintenance and repairs 

  • Supervisor's salary/wages 

  • Manager's salary/wages 

  • Utility costs 

  • ICT costs 

Factory Overheads 

Factory overhead is a type of indirect cost that includes all the costs of indirect labour and indirect materials used in the manufacture of a product. 

Factory overhead = Indirect Materials + Indirect Labour

two.png
Direct Costs
Slide2.jpeg

Direct costs are costs that are used in a manufacturing process or service and can easily be traceable to the end product or service. Some direct costs can include either direct materials or direct labour. Direct Materials: 


Direct materials are only materials that are easily traceable to the manufacture of a product. E.g. Wood used in a table. 


Direct Labour: Direct labour is the cost directly associated with the manufacture of a product. E.g. Production line worker's wages.

two.png
Slide2.jpeg
two.png
Slide2.jpeg
two.png
Slide2.jpeg
two.png
Slide2.jpeg
two.png
Slide2.jpeg
two.png
Slide2.jpeg
Time Orientation of Costs
Treatment of Costs
Relationship Costs
Behavioural Costs
Concept and Calculation of Mark Up
Direct Material Price Variance
bottom of page