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Direct expense these are the budgeted expense for a certain period of time or under the management approval. Example of this are employee benefits (i.e. Insurance, Mobile Allowance etc.)
Indirect expense these are the opposite meaning of Direct Cost which means the expense occured unplanned or somehow the materials that was purchased was used not related to the business flow of a department or managment.
It is important to track down these expenses so it can help you predict that the budget is being distributed to a rightful reason. Failing to do so could cause a problem that could affect the business flow.
Direct costs are expenses that a company can easily connect to a specific "cost object," which may be a product, department or project
Indirect costs go beyond the costs associated with creating a particular product to include the price of maintaining the entire company. These overhead costs are the ones left over after direct costs have been computed, and are sometimes referred to as the "real" costs of doing business.
Production wages are direct expesnses as it relates to factory costs and salaries are considered to be indirect expenses.
Direct expenses are related to official expenditure. Indirect expenses are related to the employees FBP which can be considered as Reimbursements.
Administrative & exceutive staff are typically considered indirect labor. Payroll of staff labour working at site which is effecting the production cost can be taken as direct expense.
