Question

What is the difference between mfg. cost and non-mfg. cost?

Answer 1

1) Mfg. cost means cost which is directly associated with manufacturing activities. It is also called direct cost. For ex : Direct material cost, labour cost, fuel cost e.t.c.

Whereas, non mfg. cost is cost which is not directly related to manufacturing acitivities. It is also called indirect cost. For ex : Administrative expenses.

2) Mfg. cost is operating cost.

Whereas, non mfg. cost is inoperative cost.

3) Mfg. cost helps to determine level of operation like operating profit.

whereas, non mfg. cost helps to determine net profit.