Question

Define compare and contrast a direct operating cost with an overhead operating cost.

Answer 1

Direct operating cost - Direct operating cost are those costs which are associated with business on day to day basis in form of administration and maintenance cost.

Overhead operating cost - Overhead operating cost are those which are incurred for the running the business in form of normal operations.

Overhead operating cost mainly covers all those costs which are required to stay in the business. While direct operating cost mainly covers both of them cost of good sold and overhead.

direct operating cost is a wider term and covers everything that you incurr in the running business while overhead operating cost is type of direct operating cost