A direct cost is a cost that can be easily and accurately traced to a specific product, service, or department. Direct costs are also known as traceable costs, and they are a type of variable cost, which means that they vary in proportion to the volume of goods or services produced.Examples of direct costs include the cost of raw materials, labor, and commissions. These costs are directly associated with the production of a specific product or the delivery of a specific service, and they can be easily and accurately allocated to that product or service.
