Direct Cost:

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Direct cost are those costs which can be conveniently associated wholly with a
particular unit of a final product. Direct costs can be directly identified with and
allocated to cost centres or cost units.
Eg:
(i) Materials which form part of the finished product – cost of wood in a firm
manufacturing furniture.
(ii) Wages payable to worker who is directly involved in production – carpenter’s
wages in a firm manufacturing furniture.
(iii) Carriage expenses on raw materials.
(iv) Worker’s wages.
(v) Raw material charges.

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