Question

what are direct and indirect costs for Indian oil corporation or any oil refinery in general?

Answer 1

Direct costs: Direct costs are the costs which are directly associated with product manufacture.

Direct cost for oil and refinery sector includes:

· Cost of crude oil used as raw material for manufacture of various products

· Cost of labor deployed in shop floor of production

Indirect costs are the costs which facilitate the production and sales of the product. They are not directly incurred in manufacture

Indirect cost for oil and refinery sector includes:

· Factory Supervisory charges

· Factory and Office buildings depreciation

· Plant depreciation

· Head office management salaries

· Advertisement expenses

· Travel expenses

· Cost of utliities like water and steam energy

· Plant maintenance