Financial accounting and costs are closely related since monitoring expenses enables companies to better understand their operational efficiency and where their money is going. It is simple to keep track of direct costs such as labor and materials used directly in the production of a product. On the other hand indirect costs like utilities or maintenance are required for production but aren't directly related to a particular product. Since they offer a comprehensive view of the costs associated with producing products and services both kinds are crucial to financial accounting.

This cost data is used by financial accounting to calculate a company total profitability. Businesses may set reasonable prices and keep expenditure under control by classifying and monitoring both direct and indirect costs. Businesses benefit from this process by making better financial decisions allocating resources sensibly and staying competitive. Accurate financial statements are supported by efficient cost tracking in financial accounting which enables businesses to display real earnings manage expenses and make necessary corrections.

Here I want to explain few differences between fixed Cost and variable costs with real case examples.

Fixed Costs	Variable Costs
Fixed Costs stay the same no matter how much is produced.	Variable Costs change based on production levels.
Example of Fixed Cost is Rent the company pays the same amount every month.	Example of Variable Cost is Raw materials costs increase as more products are made.
Fixed costs don’t depend on sales or production.	Variable costs rise with higher production or sales.
Fixed costs include salaries for managers and insurance.	Variable costs include packaging and shipping per product.
Fixed costs are predictable and easy to budget.	Variable costs fluctuate, so they’re harder to control.

A firm faces a variety of expenses when producing a good or providing a service. Consider a tiny candle manufacturing business. The salary of the workers who create each candle as well as supplies like wax and wicks are considered direct costs. Each product has a direct correlation with these expenses. However there are secondary costs that support production but aren't directly related to any one candle such as building rent or electricity to light the workspace. The business may better plan and set reasonable rates by being aware of various expense kinds.

They can determine the true cost of making each candle and prevent financial loss by keeping track of both direct and indirect expenses. Additionally this helps individuals make wise financial decisions find strategies to save money and budget for future expenses.Maintaining the company profitability and expansion requires an understanding of these cost components.

Expenses directly related to producing a product are referred to as direct costs. These consist of items like the pay of the people who are really making the product and the raw materials like wood for furniture. It is simple to associate direct costs with a particular product being manufactured.

Indirect Costs are production related expenses that aren't directly related to a particular product. These cover expenses like building upkeep power and the pay of managers who supervise the work. Although they are required for production indirect costs are not exclusive to a single item.

Non Manufacturing Costs are costs required to operate the firm .Non manufacturing expenses aid in product sales and managing the company without having a direct impact on the production process.Now I want to separate the cost of the table as.

Category	Concept	Cost
Direct Manufacturing Costs	Direct Raw Material	13
-	Direct Labor	100
Total Direct Costs	-	230
Indirect Manufacturing Costs	Manufacturing Supplies	210
-	Depreciation of Plant &Machinery	25
-	Plant Managers	65
-	Taxes & Plant Insurance	70
-	Building Maintenance	50
-	Public Services	35
Total Indirect Costs	-	455
Non-Manufacturing Costs	Delivery Costs	70
-	Sales Commissions	65
-	Sales & Administrative Expenses	80
-	Maintenance of Distribution Equipment	65
-	Advertising	20

Result

• Total Direct Manufacturing Costs = 230
• Total Indirect Manufacturing Costs = 455
• Total Manufacturing Costs = 685
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I invite @shano49 @malikusman1 and @saboohi to take participate in this contest

Thank you

_{Bundles of thanks to you for taking the time to read my post, and I sincerely hope that my creative insights will be enjoyed by everyone here.}

ACHIEVEMENT 1 LINK

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https://steemit.com/hive-172186/@neelofar/achievement1-my-introduction-to-steemit

WRITER:

@neelofar from Pakistan