Film Accounting Glossary
Direct cost
What is a direct cost?
A direct cost is a cost attributable to one specific production, department, or account without any allocation: a camera operator's wages, a specific vehicle rental, one location fee.
Direct costs are the easy part of production accounting and the part that survives audit cleanly. The judgment and the audit risk live in indirect costs and allocations.
Example
The camera operator's wages, the specific Mustang rented for scene 41, and the $3,500 parking lot fee are each attributable to one account with no judgment involved. They survive audit on the strength of the invoice alone.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
The overwhelming majority of the cost report, and the easy part of production accounting. Audit risk lives in indirect costs and allocations instead.
Common mistake
Reclassifying something as direct to avoid documenting an allocation. If two departments used it, it is indirect, and calling it direct just moves the audit question.
Related questions
- What is an example of a direct cost on a film?
- A specific crew member's wages, one vehicle's rental for one scene, or a single location fee. Anything attributable to one account without judgment.
- How do direct and indirect costs differ at audit?
- Direct costs are proved by the invoice alone. Indirect costs also need a documented, consistently applied allocation basis, which is where disallowances arise.