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– Partfinished work which is transferred from department 1 to department 2 – Primary packing materials like cartons and boxes Direct wages ? All wages paid for labour expended on work on the product itself ? Examples: – Workers engaged in altering the condition, conformation or position of the product – Inspectors, analysts and testers specifically required for such production Direct expenses ? Any expenses which are incurred on a specific product other than direct material cost and direct wages ? Examples: – The cost of special designs, drawings or layouts – The hire of tools or equipment for a particular job – Maintenance costs of tools etc. Overheads ? Includes all indirect material cost, indirect wages and indirect expenses incurred by a business ? Overheads can be associated with: – Production – Administration – Selling and distribution Production ? Indi