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As you increase production, you need more raw materials to work with. These raw materials represent a cost and that cost varies depending on how much of your product you are (2003-2007, Business Source).
The term indirect cost represents the company’s expenses that are not readily identified with a project function or activity, but are necessary for the general operation of the company and the conduct of activities it performs (2007,McDonald)...
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Some examples of indirect costs are taxes, personnel, and administration costs.
The term direct cost is also used to describe costs in the company. Direct costs are opposite of indirect costs in the way that they can be easily identified with a particular project. An example of direct costs would be ordering supplies for a specific project such as binders, divider tabs, and paper...
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