CAS-10: Direct Expenses

• What a direct expense is (§§4, 5.1, 5.3)
• Counting a bought-in service at the right amount (§5.2.1)
• Sharing a one-time fee (§5.2.3)
• What stays out, and what to disclose (§§5.4–5.10, 8)

Chapters

1. Bills that belong to one order · Not cloth, not tailors, but still clearly for this order (§§4, 5.1, 5.3, 6)
2. The embroiderer’s bill · Take the agreed price; leave out tax you get back and interest; take off refunds (§§5.2.1, 5.4, 5.10)
3. One design, three years of uniforms · Spread a one-time fee over everything it helps make (§5.2.3)
4. Adding up the order’s direct expenses · One line on the Uniform Cost Card (§§5.9, 7, 8)
5. Spot the mistakes in the direct expenses · Use everything from this lesson (§§5.2.3, 5.4, 5.5, 5.9)

Key terms

• Direct expenses (§§4, 5.1, 5.3, 6): Costs of making a product or giving a service that can be traced to it, other than direct material and direct employee cost. Examples: job work, hire for a specific job, royalty on production, travel for a specific job. Small ones can be treated as overheads.
• Measuring direct expenses (§§5.2–5.10): Bought-in services at the agreed price, less discounts and tax you get back. Other expenses at what they cost. One-time fees spread over the output or months they help. Left out: interest, pretend costs, unusual losses, fines. Taken off: subsidies, refunds and recoveries.