Do you have more control over direct costs or indirect costs? explain why.

Question: Do you have more control over direct costs or indirect costs? explain why.

In the realm of business finance, control over direct and indirect costs varies due to their inherent nature. Direct costs are those that can be directly attributed to the production of goods or services, such as raw materials and labor. These costs are typically variable and fluctuate with the level of production, making them more controllable as they can be adjusted based on the output levels. On the other hand, indirect costs, also known as overheads, include expenses like rent, utilities, and administrative salaries. These costs are not directly tied to production levels and are often fixed or semi-variable, making them less controllable on a day-to-day basis. However, indirect costs can be managed through strategic planning and efficiency improvements over time. Ultimately, while direct costs offer more immediate control, indirect costs require a long-term approach to management and optimization.

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