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    Question

    Which of the following is an example of indirect

    cost?
    A Jute in gunny bags Correct Answer Incorrect Answer
    B Packing material Correct Answer Incorrect Answer
    C Battery in transistor Correct Answer Incorrect Answer
    D Stores in service canteen Correct Answer Incorrect Answer
    E Starch in dressing yarn Correct Answer Incorrect Answer

    Solution

    Indirect Materials are those for which a direct relationship cannot be established between materials used and the units produced. They cannot be easily identified with finished goods. Indirect materials are ancillary to production. Indirect materials cost is considered as part of overheads. Examples: (a) Lubricating oil, (b) cotton waste, (c) Grease, (d) Small tools, (e) Stationery in factory or office, stores in canteen, etc. Concept discussed in many live classes

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