The basic differences between direct cost and indirect cost are given as under:
The cost which is easily apportioned to a particular cost object is known as Direct Cost. Indirect Cost is the cost that can’t be charged to a particular cost object.
Direct Cost benefits the single product or project. Conversely, Indirect Cost benefits multiple product or projects.
The total of all the direct cost results in prime cost whereas the result of all the indirect cost is known as overheads.
Direct Cost is traceable while Indirect Cost is not.
Direct cost is subdivided into the direct material, direct labor, direct expenses. On the other hand, indirect cost is subdivided into production overheads, administration overheads, selling & distribution overheads.