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Administrative Costs
What do you mean by Administrative Costs?
Administrative expenditures, defined as the cost of administering business directions, are a significant expenditure. There are two types of costs: direct and indirect. While direct expenses are incurred during direct firm operations (such as sales or distribution), indirect costs supplement this. These indirect costs, which include administrative expenditures, allow people directly involved in company operations to fulfil their responsibilities instead of being distracted by other tasks. An example demonstrates this: rather than recording each marketing expense in a firm accounting system, the marketing department spends its budget and saves invoices. The accounting department, which accounts for the firm's finances as part of the total administrative expenditures, then compares these bills to corporate accounts.
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