An increase in indirect costs will appear in the profit and loss section of the Profit and Loss Account.

Indirect costs are those not directly involved in the cost of sales. In other words they appear as expenses.

Higher indirect costs will increase the expenses of the firm. This in turn will;

• Reduce operating profit
• Reduce profit on ordinary activities before tax
• Reduce profit after tax
• Reduce retained profit carried forward

There are various indirect costs as inputs.

• Rent on Office Equipment per year (£)
• Office Rates and Rent (per month)
• Office Staff Salary (£)
• Operatives Staff Salary (£)
• Ship Maintenance (£)

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