What term describes the costs that can be directly attributed to a specific project?

The term that describes costs directly attributable to a specific project is "Direct costs." These costs are those that can be clearly linked to the operation of a particular project, such as materials, labor, and direct expenses necessary to complete the work. Direct costs are essential for accurate project budgeting and financial reporting as they provide a clear understanding of the resources being consumed on a specific job.

Understanding direct costs is crucial for contractors as they directly impact the cost estimation and pricing strategies for projects. By accurately identifying and allocating these costs, contractors can ensure they maintain profitability while effectively managing project expenses.

In contrast, indirect costs represent expenses that are not directly tied to a single project, such as administrative salaries or office supplies. Variable costs fluctuate with the level of production or project activity but are not necessarily unique to one project. Overhead costs include ongoing expenses to support overall operations but don’t directly link to specific project outputs. In the context of project cost management, recognizing which costs fall under direct costs is vital for effective financial planning.