Direct labour is also described as process labour

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Direct labour is also described as process labour, productive labour, operating labour, manufacturing labour, direct wages etc.
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267 Indirect labour:- labour employed for the purpose of carrying out tasks incidental to goods or services provided, is indirect labour such labour does not alter the construction, composition or condition of the product. It cannot be practically traced to specific units of output wages of store keepers, foreman, time keepers, directors, fees, salaries of salesmen, etc. are all examples of indirect labour costs. Indirect labour may relate to the factory the office or the selling and distribution division. c. Expenses: - Expenses may be direct or indirect. Direct expenses: - These are expenses which can be directly, conveniently and wholly allocated to specific cost centers or cost units. Examples of such expenses are: hire of some special machinery required for a particular contract, cost of defective work incurred in connection with a particular job or contract etc. Direct expenses are sometimes also described as “chargeable expenses”. Indirect expenses :- these are expenses which cannot be directly, conveniently and wholly allocated to cost centers or cost units. OVERHEADS: - It is to be noted that the term overheads has a wider meaning than the term indirect expenses overheads include the cost of indirect material, indirect labour besides indirect expenses. Indirect expenses may be classified under the following three categories:- (a) Manufacturing (works, factory or production) expenses:- Such indirect expenses which are incurred in the factory and concerned with the running of the factory or plant are known as manufacturing expenses. Expenses relating to production management and administration are included there in. Following are a few items of such expenses: Rent, rates and insurance of factory premises, power used in factory building, plant and machinery etc. (b) Office and Administrative expenses These expenses are not related to factory but they pertain to the management and administration of business such expenses are incurred on the direction and control of an undertaking example are :- office rent, lighting and heating, postage and telegrams, telephones and other charges; depreciation of office building, furniture and equipment, bank charges, legal charges, audit fee etc. (c)Selling and Distribution Expenses:- Expenses incurred for marketing of a commodity, for securing orders for the articles, dispatching goods sold, and for making efforts to find and retain customers are called selling and distribution expenses examples are:- Advertisement expenses cost of preparing tenders, traveling expenses, bad debts, collection charges etc. Warehouse charges packing and loading charges, carriage outwards, etc.
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268 ELEMENTS OF COST The above classification of different elements of cost can be presented in the form of the following chart: 21.3.5 ITEMS EXCLUDED FROM COST ACCOUNTS There are certain items which are included in financial accounts but not in cost accounts.
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