What's the Difference Between A Direct Cost And An Expense
A Direct Cost is related to the cost of productio n or it is t he Cost of Goods Sold . Direct cost is also called Direct Expe nse in Accounting as it is incurred to produce goods or products t hat are sold to ultimate customers for the period. The direct cost i ncurred to provide main source of revenue to t he b usi ness suc h as a compa ny manufactures c hairs, the n any cost incurred in t he productio n or manufacturing of c hairs is called direct cost. A n Expense Accou nt may or may not be related to t he cost of productio n i.e., if it is incurred for t he cost of productio n, t he n it is called direct expense or direct cost of production and if it is incurred not for running b usi ness operations, w hich is usually i ncurred for b usi ness office use, but for non operating activities w hich are not related to t he cost of productio n or w hich are not i ncurred for generating main source of revenue for t he b usi ness is known as indirect expense or ...