Distinguish between direct and indirect costs in a corporate

Distinguish between direct and indirect costs in a corporate bankruptcy.(150 words and no plagiarism please)

Solution

Direct costs:      

                In general, direct costs are those costs which are directly incurred to carry out the activities concerned. In other words, these are compulsory costs without which the proposed activities, may be production activities or providing services, etc. In case of bankruptcy proceedings, the liquidating business is required to incur certain costs which are unavoidable and directly related to bankruptcy proceedings such as legal costs, accounting costs, and loss of tax benefits, etc. to liquidate business\' assets. These costs are technically termed as direct costs in a corporate bankruptcy.

Indirect costs:   

In general, indirect costs are those costs which are not directly incurred to carry out the activities concerned. In other words, these are not compulsory costs to carry out the activities concerned. However, these costs are will be incurred during the production activities or rendering services indirectly. In case of bankruptcy proceedings, the business will be incurring some opportunity costs such as loss of creditors, loss of employees, loss of lending from lenders, and the loss of trust with customers, etc. These costs are purely based on the type of bankruptcy the business files and are indirect costs.