The Income/Outcome^® Contextuary

a visual glossary of corporate finance

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This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.

We use "business visualization" to graphically simplify complex business concepts (and increase business acumen). To get more information on business visualization, please see "The Company Board" (our business results visualizer) and Income/Outcome (our customizable business simulation).

The following are our generic explanations of common corporate financial terminology. Actual meanings can vary wildly from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"

To get more information about the authors, please see our Directory of Contributing Editors.

Direct Cost

The cost of labor, materials and any direct overhead incurred in producing the goods and services.

Conceptually, Direct Costs, Cost of Sales (COS) and Variable Costs are very similar. Check how each term is used in your company.

See also Indirect Cost.

Full it flag term list.

The Income/Outcome® Contextuary

a visual glossary of corporate finance

Direct Cost

The Income/Outcome^® Contextuary