direct cost
compound.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.
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.
Often used in plural form when referring to multiple types of expenses; frequently contrasted with indirect or overhead costs.