Classification Of Costs – Direct and Indirect Costs

Direct and indirect costs are two more costs which are involved in running a business.  Direct costs are those costs directly associated with the manufacturing or production of a product.  This includes labor that is directly related to making the product and purchased materials which are directly related to making the product. Engineering costs can be applied directly to a product so they would be included in direct costs.

Indirect labor costs are those costs that cannot directly be related to the production of a specific product.  These would include the basic overhead which is used in the production of all the different products at the company.  Some examples would be rent, wages of supervisors and managers, office staff, electricity and power consumption, repair and maintenance costs and even consumables like gas, oils and lubricants.

In the world of manufacturing a software package which can handle direct and indirect costs is a must and software from MIE Solutions.  This software can help your manufacturing company become more competitive and cost conscious. 

Author: MIE Solutions

David Ferguson has over 20 years of experience in the manufacturing and fabrication industry. David Ferguson has been to over 100 manufacturing companies helping and guiding them to be more efficient and cost effective. As a child in Junior High School David Ferguson found a passion for the early computer systems, which would drive much of his future work. David Ferguson created and sold his first computer program, Arrow Data Systems, which was an early CAD/CAM system for the Apple 2e Computer. In the late 1980's after seeing his father (a sheet metal manufacturer) come home many nights estimating, David Ferguson saw an opportunity to optimize his effort through computer technology. Shortly thereafter the FabriTRAK Production Control package was developed. The Quote It! estimating package was developed out of the FabriTRAK system to become one of the leading sheet metal estimating packages in the world. David Ferguson has always had a passion for developing software to make the manufacturing process simpler, faster and more efficient. Prior to founding MIE Solutions David Ferguson worked with his father at Alco Sheet Metal, METALSOFT Inc. and was a consultant at Toyota Motors Sales. David Ferguson has his Masters in Computer Science and Mathematics from California State University, Long Beach.

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