Indirect production expenses

Last updated: 26.03.2016

Indirect production expenses are costs that are part of indirect production costs (production overheads) and are included neither in material or labor production overheads.  As being part of overheads, they are NOT directly and clearly identifiable with cost object (usually product or service).

Example of indirect production expenses: rent, depreciation, insurance and power for production premises common for the production of more different products

 

Because the production differs from industry to industry, or even from business to business it is difficult to prepare a detailed list of indirect expenses. There are usually only a several general lists and definitions (see e.g. above) which can help to comprehend their meaning. Therefore, the final detailed classification is up to the entity.

 

More about production overheads and their booking here.



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