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What is the difference between direct and indirect expenses?

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Question ajoutée par Danish Farid , Tax Associate , Limra Law Firm
Date de publication: 2013/07/02
Hadi Husaini
par Hadi Husaini , Senior Manager - Indirect Taxation , Biological E Ltd

Direct Expense is an expense which varies with final product; Example: final product - Ketchup bottle direct expense- tomatoes, bottle, wages IF FINAL PRODUCT INCREASES, DIRECT EXPENSE INCREASES.
indirect expenses- rent, salaries IF FINAL PRODUCT INCREASES, INDIRECT EXPENSES REMAIN UNCHANGED (UPTO CERTAIN POINT)

Muhammad Asif Jajja
par Muhammad Asif Jajja , Accountant , Pakistan Veterinary Medical Council

Expenses connected with purchases of goods are known as direct expenses.
For example, freight, insurance of goods in transit, carriage, wages, custom duty, import duty, octroi duty etc however all expenses other than direct expenses are assumed as indirect expenses such as rent of building, salaries to employees, legal charges, insurance of building, depreciation, printing charges etc.

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