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Direct Cost is variable cost or fix cost ?

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Question ajoutée par Amjed Mehboob , G.M -(Currently Job Seeking ) , Advance Education centre
Date de publication: 2016/05/28
Barkat Ali
par Barkat Ali , Accountant , Abdullah Bin Ahmed Bin Mohd Al Muzahmi Trading

Cost that can be readily identifiable or traced directly to exact cost center such as direct material, direct labor, fuel or power these are vary with the rate of output but are uniform for each unit of production, and are usually under the control and responsibility of the department manager. As a general rule, most costs are fixed in the short run and variable in the long run.

Direct costs can include fixed and variable costs. Direct fixed costs can be easily traced to cost objects and do not vary with the level of production. Direct variable costs vary with production levels.

Direct cost can be fixed and variable. For example, the Furniture manufacturing company is producing new furniture (suppose tables and chairs). Salaries to the employees shall be same for every year, no problem how many chairs and tables they manufacture. The owner of the company must purchase raw material for making furniture. This cost is the direct cost because it can be easily identifiable and this cost will change with production. The salaries are direct cost because it will not change with production. Variable cost like the cost of wood needed while making tables. Mixed costs like the cost of telephone where you pay a fixed X while idle and pay an additional Y for every minute of talk.

Amjed Mehboob
par Amjed Mehboob , G.M -(Currently Job Seeking ) , Advance Education centre

Direct cost is always variable cost , as the qauntity of output varies the cost also varies .

مها شرف
par مها شرف , معلمة لغة عربية , وزارة التربية السورية

I agree with experts answer. Thanks for the invitation. 

Priyanka Ghaghda
par Priyanka Ghaghda , Head of Marketing , Financial Economics Student Association

Direct cost is a variable cost

I leave the answer to the experts and the specialists in this field .

Shameer Nazir Madari
par Shameer Nazir Madari , Assistant Finance Manager , METAL AND RECYCLING COMPANY K.S.C. (PUBLIC)

A cost that is traced back to specific cost object i.e. a product or a cost center etc. is a direct cost and traceable costs can be fixed costs in nature. For example, labor is paid on monthly basis, fixed amount of royalty paid every year.

ghazi Almahadeen
par ghazi Almahadeen , Project Facilitator , Jordan River Foundation

Thanks for the invite ............................ Leave an answer to the experts

ABDELMAJED AHMED SAEED
par ABDELMAJED AHMED SAEED , Cyber Security GRC Manager , Medgulf

Direct cost is variable, but fix cost is constant

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