Word
direct cost
Definition
compound. an expense that a company can easily link to a specific product or service. It includes things like the raw materials and the labor used to make that item.
compound. an expenditure that can be specifically traced to a particular cost object, such as a product, service, or project. It typically comprises direct materials and direct labour.
Examples
“The price of steel is a direct cost for the car manufacturer.”
“To calculate the profit margin on each unit, the manager must first identify every direct cost associated with its production.”
“While indirect costs like rent and administration are allocated across the entire business, direct costs are assigned exclusively to the specific output they help generate.”
Examples
simple
“The price of steel is a direct cost for the car manufacturer.”
contextual
“To calculate the profit margin on each unit, the manager must first identify every direct cost associated with its production.”
complex
“While indirect costs like rent and administration are allocated across the entire business, direct costs are assigned exclusively to the specific output they help generate.”
Usage
Often used in plural form when referring to multiple types of expenses; frequently contrasted with indirect or overhead costs.
- Exam level
- CambridgeCambridgeCambridge English QualificationsThe exam suite from Cambridge University Press & Assessment, from A1 Movers up to C2 Proficiency. The benchmark names double as CEFR labels.B2 FirstIELTSIELTSInternational English Language Testing SystemThe 0–9 band test co-owned by the British Council, IDP, and Cambridge. Used for university entry, work, and migration.5.5–6.5TOEFL iBTTOEFL iBTTest of English as a Foreign Language, Internet-Based TestETS's academic English test, the standard route for US university admissions. Scored 0–120, with a 1–6 scale since 2026.1–6 scale: 4.0–4.572–94TOEICTOEICTest of English for International CommunicationETS's workplace English test, big in Japan and Korea. Listening & Reading scores 10–990 and tops out at C1.785–944
- Level
- B2 · Upper Intermediate
- Updated
- アルファベット
- 読み方の一覧 →
QR code
englishreference.com/q/direct-cost