What does indirect cost mean in business terms?

The term indirect cost refers to all costs that are not directly associated with the production of a product or service. Examples of indirect costs include depreciation and maintenance costs, insurance, and office supplies. These costs are usually fixed. They do not change based on how many items you sell.

What does the term indirect cost mean in business terms?

indirect costs are all the costs that are not direct costs. Indirect costs are the costs of activities that are not directly related to a company’s product or service. Indirect costs can be further classified into 2 main categories: fixed costs and variable costs. Fixed costs do not change with the amount of work performed, while variable costs do. If your business has an employee, fixed costs are things like the salary for your staff member, while variable costs would be things like lunch provided to

What does the term indirect cost mean in a business context?

Indirect costs are all of the expenses that are not directly linked to the production of a product or service, but instead have an impact on the production process. The most common example of indirect costs is the cost of the office space provided to a company. The rent a company pays to its landlord isn’t directly related to the products the company produces, but it does impact how much capital a company has available to invest in other aspects of business like advertising or hiring new employees.

What does the term indirect cost mean?

Indirect costs are those that are not directly tied to a single service or product. These costs can be categorized as fixed or variable. Fixed costs remain the same regardless of how many of that service or product you use. Variable costs, on the other hand, are dependent on the number of services or products you use.

What does word mean in business terms?

Variable costs are those that are directly tied to the amount of products or services that are produced or provided to the customer. Take a doctor’s office. A visit with the doctor is a variable cost because the more patients the doctor sees, the more the doctor will have to spend on office supplies, office space, and other expenses. These costs are fixed regardless of how many patients were seen. Here’s another example—let’s say you’re running an online retailer