Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 6

Distinguish between direct and indirect costs and give several examples of each.

Step 1 of 3

Cost:

Cost refers to the expenditure incurred to manufacture product or provide a service. Since a number of cost are incurred during production process these costs are required to be bifurcated based on their usage, frequency etc.

Costs are primarily divided into direct cost and indirect cost.