Expenses may be defined as \u201cthe costs of services provided to an undertaking and the notional costs of the use of owned assets\u201d.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
*Direct expenses are defined as \u201ccosts, other than materials or wages, which are incurred for a specific product or salable service.\u201d<\/p>\n\n\n\n
Nature of Direct Expenses<\/strong><\/p>\n\n\n\n Direct expenses are directly attributed to cost unit\/cost center. It includes all direct cost except the direct material and direct labour.<\/p>\n\n\n\n Types of Direct Expenses are as under:<\/p>\n\n\n\n Accounting Treatment of Direct Expenses<\/strong><\/p>\n\n\n\n Direct expenses are chargeable expenses and are debited to Direct Expenses Account in financial books.<\/p>\n\n\n\n \uf020The term \u2018direct expenses\u2019 has been excluded from prime cost as per latest CIMA terminology, i.e. according to CIMA, prime cost is \u201cthe total cost of direct material and direct labour\u201d<\/p>\n\n\n\n Accounts are prepared in columnar form so that the analysis can be made and the expenses can be related to the specific job\/contract.<\/p>\n\n\n\n In cost accounting records, the direct expenses account is credited and the concerned account is debited. The cost department should verify from the accounts department that the expenses are properly booked. These expenses should not be mixed up with overheads.<\/p>\n\n\n\n Control of Direct Expenses<\/strong><\/p>\n\n\n\n Items under this head are few. They form a small part of the total cost. Such costs are controlled by fixing standards. The actual should be compared with the standard. The causes of variations, if any, should be ascertained and necessary corrective action should be taken.<\/p>\n","protected":false},"excerpt":{"rendered":" Expenses may be defined as \u201cthe costs of services provided to an undertaking and the notional costs of the use of owned assets\u201d. 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…<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-107120","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"\n