Direct Expenses

Direct expenses are costs that can be directly attributed to a specific project, product, or service. For example, if a company manufactures shoes, the cost of materials like leather and rubber, as well as labor directly involved in production, are considered direct expenses. These expenses fluctuate with the volume of goods produced; the more shoes made, the higher these costs will be. Understanding direct expenses is crucial for businesses to accurately assess profitability and manage budgets related to individual projects or products.