Page 29 - F2 Slides 2017-18

Nature

Direct costs : costs which can be directly identified with a

specific unit or cost centre

Total of direct costs =

Direct Materials + Direct labour + Direct expenses =

Prime Cost

Indirect costs : costs which can not be directly identified

with a specific unit or cost centre

Indirect costs =

Indirect Materials + Indirect labour + Indirect expenses =

Overheads

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