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Last edited 09 Mar 2021
Indirect costs in construction
Indirect costs (or indirect spend) are those costs that are necessary to keep a process or project running, but which do not vary directly with the volume of goods or services produced and are not easily attributable to a particular process or project. This might for example include; rent, insurance, advertising and marketing and so on. These types of indirect costs may be referred to as overheads.
This is as opposed to direct costs, which are those costs incurred directly by production and include items such as raw materials, labour, equipment, power and so on. Direct costs can be traced and are attributed to a cost ‘object’ which may be a product, department, cost centre or project.
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