What are indirect costs?

Indirect costs cannot be attributed to a specific element or department. Costs contribute to the overall operation of the company. DAO legal wrapper will help you with work issues. For example, they can be spent on:

1. Buildings/premises
2. The car
3. IT solutions
4. for fucking
5. Management and administration
6. Interest
7. Rent
8. treasure

In other words, indirect costs do not depend on the turnover of the company. It is the fixed costs of the company that ensure the work of the entire company. In the accounting world , this is also known as calculating the cost of electricity .

Indirect costs are divided into three categories:

1. Production costs
2. Administrative costs
3. Sales and distribution costs
4. What is common to all costs is that they are not directly related to a single project or product.

How are indirect costs?

Indirect costs are similar to electricity costs. In accounting, this refers to fixed costs.

The cost of electricity allows the business to exist. This is a good rule of thumb when determining the cost of electricity. For example, a company cannot have employees without paying wages. You also cannot buy IT equipment for employees without depreciation, since the equipment has a limited service life.

Once you determine the electricity costs, you can split them…

It can be divided into three categories:

1. Advertising expenses, for example. Marketing expenses.
2. Expenses for cash, for example. salary, cleaning and rent.
3. Depreciation, for example. cars, equipment and other assets.
4. Of course, electricity costs are fixed, but they may change if operating costs change. If the company’s rent increases, it will increase the power costs on the accounts.

But electricity costs will always be classified as fixed costs, since they do not change in the short term.

In the end, the cost of electricity should be reflected in the profit and loss statement of the company.

What is the difference between fixed costs and variable costs?

Unlike fixed costs, they are variable costs. Posting accounting entries can become more sensitive when you know both terms. Either either — either honestly groaning, or variable. So what about variable costs?

… The costs of placing variable leather equipment with sales for sale and production, i.e., the rastavs change when the profit increases.

Examples of variable costs:

1. Energy consumption
2. Purchase of raw materials/materials
3. Cargo
4. What is common to all variable costs is that they are determined by how much is produced/sold.

In the income statement, costs are the sum of electricity costs and variable costs.