direct cost allocation
[dəˈrɛkt kɔst ˌæləˈkeɪʃən]
nounpl: direct cost allocations
alocação de custos diretos
1. The process of assigning costs that can be directly traced to a specific product, service, department, or cost center without the need for allocation formulas or assumptions
Direct cost allocation for manufacturing includes assigning raw materials and labor directly to each product unit.
A alocação de custos diretos na manufatura inclui atribuir materiais-primos e mão de obra diretamente a cada unidade de produto.
2. An accounting method where identifiable costs are distributed to cost objects based on clear traceability rather than estimation
The company uses direct cost allocation to assign machine operator wages to specific production departments.
A empresa usa alocação de custos diretos para atribuir salários de operadores de máquinas a departamentos de produção específicos.
In Brazilian accounting practice, direct cost allocation is a fundamental principle taught in business schools and is essential for compliance with Brazilian accounting standards (CPC - Comitê de Pronunciamentos Contábeis). In the USA, this concept is central to cost accounting and is emphasized in financial reporting under GAAP. Both contexts value the precision and verifiability that direct cost allocation provides compared to indirect cost allocation.
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