Question

what is the difference between direct and indirect material and labors?

Answer 1

Differences between direct material and indirect material :-

Direct material	Indirect material
1. It is easily identifiable	1. It cannot be identifiable easily
2. It can be measured conviniently	2. It will be measured in overall basis
3. It will be charged directly to the cost of product	3. It will not be charged to cost of product but it is charged aganist cost centre of production line
4. It includes in factory cost	4. It will be includes in other than factory cost

Difference between direct labour indirect labour :-

Direct labour	Indirect labour
1. This will be included in cost of goods sold	1. This is not included in cost of goods sold
2. Wages paid to labour who work at factory level will be considered as direct labour	2. Salaries paid to employees who work at other than factory level. i.e at administration and marketing level
3. The direct labour is paid on the basis of production. Ex :- wages per produced unit	3. The indirect labour is paid on the basis time period. Ex :- monthly salary
4. The work done by direct labour can be tracked easily at factory level	4. The work done by indirect labour cannot be tracked easily at any level.

All the direct cost are tracked and identifiable at factory cost and all the indirect costs are apportioned on some specified basis.

These are all the information required to solve the above given question.

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