IME Accounting Abbreviation

Indirect Manufacturing Expense

Indirect Manufacturing Expense (IME) refers to the costs associated with the production process that are not directly tied to the creation of a specific product. These expenses include utilities, depreciation of equipment, and salaries of supervisory personnel. Understanding IME is crucial for accurate product costing and financial reporting in the manufacturing sector.

In accounting, accurately allocating IME ensures that financial statements reflect the true cost of production. This allocation affects pricing strategies, profitability analysis, and inventory valuation. Companies must carefully track these expenses to maintain compliance with accounting standards and to make informed operational decisions.