How are direct costs and variable costs different?

How are direct costs and variable costs different? Direct costs can be tied to a product, while variable costs are tied to the number of units produced. Some variable costs can be classified as direct costs, but many direct costs are fixed. For example, direct materials and direct labor are both variable costs because they fluctuate based on ...

What does direct costs mean?

Direct costs are expenses that a company can easily connect to a specific "cost object," which may be a product, department or project. This can include software, equipment and raw materials.

What does indirect expenses mean?

What are Indirect Expenses? Indirect expenses are those expenses that are incurred to operate a business as a whole or a segment of a business, and so cannot be directly associated with a cost object, such as a product, service, or customer.