Direct Operating Costs

Direct operating costs (DOC) is a business term that refers to all of the costs associated with producing, selling and delivering a product or service. This type of cost includes direct labor, material, overhead expenses and distribution expenses. It excludes non-operating expenses such as interest, amortization and stock-based compensation. Understanding your DOCs is key to making informed decisions about how to most effectively run your business. By examining these costs, you can identify areas for improvement and set strategic objectives for increasing efficiency and profitability.