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Direct Expenses – 10 MCQs Quiz to Test Your Knowledge !

Direct Expenses

Direct expenses are those expenses which are directly chargeable to a job account. Direct expenses may be defined as those expenses which are easily identifiable and attributable to the individual units or jobs. All expenses other than the direct material or direct labour which are incurred for a particular product or process are termed as direct expenses. Expenses which can be identified with a territory, a customer or product can be considered as direct expenses. Expenses in relation to a department may be direct but are indirect in relation to the product.

There is no hard and fast rule regarding classification of expenses into direct and indirect. Direct expenses are specific charges directly attributable while the indirect expenses are apportioned on suitable basis. Some items by nature are direct but treated as indirect because the amounts chargeable are either of small or negligible value. It is difficult and costly to analyse them and hence treated as indirect expenses, e.g. nuts, screws, thread, glue, etc.

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