155k views
1 vote
Explain the difference between direct and indirect costs, give examples.

User Shaolang
by
6.7k points

1 Answer

5 votes
The essential difference between direct costs and indirect costs is that only direct costs can be traced to specific cost objects. A cost object is something for which a cost is compiled, such as a product, service, customer, project, or activity. Example of direct cost is direct labor or direct material and indirect cost is quality control cost or supervision salary
User Eirik W
by
6.8k points