The expenses which are not directly related to product to be sold or the services to be rendered to the customers are called as indirect expenses. These expenses are called fixed expenses also. It means whether the production of any product is increased or decreased these expenses are not affected.

All administration expenses like conveyance, telephone expenses, and rent of office, printing and stationery expenses, advertisement expenses, salary to administration staff are few examples of indirect expenses.

Suppose there is very little production in a particular month in that case the direct expenses may be less in the ratio of production but the indirect expenses shall not be affected as per the quantity of product. That is why these are called as indirect expenses or fixed expenses or indirect cost.

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