What are some examples of direct costs in business?

What are some examples of direct costs in business?

Direct costs are expenses that can be directly attributed to a specific product or service. Examples include raw materials, labor costs for production, and manufacturing supplies.

Can you give me specific examples of direct costs for a bakery?

Sure! For a bakery, direct costs would include flour, sugar, eggs, and the wages of bakers directly involved in making the products.

Are there any indirect costs I should be aware of?

Yes, indirect costs are expenses that are not directly tied to a specific product. Examples include rent, utilities, and administrative salaries.

How do direct costs affect pricing strategies?

Direct costs play a crucial role in pricing strategies as they help determine the minimum price at which a product can be sold to cover expenses.