Direct expense or Direct Cost is the expense that is linked to a specific cost object. A direct cost is a price that can be directly tied to the production of specific goods or services. A direct cost can be traced to the cost object, which can be a service, product, or department. In other words, Direct expenses are costs that can be traced back to a specific department, often called an object, and are incurred only to benefit that department. In other words, direct expenses sole purpose is to benefit one department. Any cost that's involved in producing a good, even if it's only a portion of the cost that's allocated to the production facility, are included as direct costs. Direct labor, Direct materials, Manufacturing supplies, Wages for the production staff and Fuel or power consumption can be considered as the examples of direct expenses. Please check the following presentation to know more about it.

Aparika Sharma

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