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Indirect manufacturing costs are a manufacturer's product costs other than direct materials and direct labor.
Indirect manufacturing costs are also referred to as manufacturing overhead, factory overhead, factory burden, or burden. This may not be a problem for financial reporting if the amount of inventory is consistently small, but it can be a problem for pricing and other decisions.Examples of indirect manufacturing costs include:
Depreciation, repairs and maintenance, electricity, etc. for the production facilities and equipment.
Salaries, wages and fringe benefits of the indirect manufacturing personnel such as production supervisors, material handlers, quality assurance, and other factory support personnel.
Factory supplies, outside services pertaining to manufacturing, and other manufacturing related costs.
The additional cost incurred by the employer in producing or manufacturing a product is known as indirect manufacturing cost.
eg:- transportation cost,insurance for the workers..etc
indirect manufacture cost
cost which cannot tracable to the product
such as gule for chairs
Direct Manufacturing Cost - In simple way it is the Cost of Manpower, Material, Machines.
Indirect Manufacturing Cost - List of activities required/occurs during the manufacturing of the product viz, Overheads,Cost of maintenance, training of manpower,Cost of R&D, insurance.Indirect costs are the most varying kind & determines whether the manufacturing is profitable or not.
Direct costs are costs that can be identified to a particular product or cost center. Indirect costs are the ones which needs to be apportioned on some suitable basis. Costs incurred towards materials, men ( wages paid to workmen related category) and expenses directly attributable to the product is called direct costs or prime costs.
Indirect costs include deprecation, Insurance, Salary of executives, rent paid which needs to be apportioned to the products on some suitable basis
IT IS THE MAINTAINANCE COST APART FROM THE PRODUCTION OF THE COMPONENT
Indirect manufacturing costs is;
-Repairs and maintenance,electricity,etc.
-Salaries wages and benefits,supervisors,material handlers,quality assurance etc.
-Factory supplies,services oudside
the additional cost added to manufacturing and wich is not related to product such as freught, customs , insurance, etc
"We can consider all the costs that are not related to the product manufactured by a compagny , like insurance , transportation , fines etc etc...."
indirect manufacturing costs include
the cost of transportation etc which are not directly effective on the product
