Direct Costs vs. Overhead Costs: What’s the Difference?

Direct Costs vs. Overhead Costs: What's the Difference?

Getting this distinction right affects your margin calculations, your pricing, and how accurately you understand product-level profitability. Direct costs Costs directly traceable to producing a specific product or delivering a specific service โ€” raw materials, production labor, packaging for that specific item. These scale directly with how much you produce or sell. Overhead (indirect) costs … Read more