FUNDAMENTAL CONCEPTS OF COST — Commercial Studies STD 10 — Question

The components of Direct cost include the following:
(i) Direct material: Cost which is assigned to specific physical unit is called as direct material. For example, sugarcane in a sugar mill.
(ii) Direct labour: Cost incurred on labour who actively takes part in the production is called as direct labour. For examples, wages.
(iii) Direct expenditure: Expenditure which can be directly allocated to cost centres are called as direct Expenditure.