Which term refers to the direct costs attributable to the production of goods sold?

The term that refers to the direct costs attributable to the production of goods sold is "Cost of Goods Sold." This figure encompasses all expenses directly tied to the manufacturing of the products a company sells, including materials, labor, and any other direct costs incurred during the production process. This financial metric is crucial for understanding the direct costs associated with production, as it helps in calculating gross profit by subtracting these costs from revenue generated from sales.

Operating expenses, while important, are usually broader costs that are not directly tied to the production itself, such as administrative and selling expenses. Overhead costs include indirect costs related to production but are not classified as direct costs, as they cannot be traced directly to specific goods. Direct labor represents the labor costs that can be directly attributed to the production of goods; however, it is only one component of the broader category represented by the cost of goods sold. Understanding these distinctions helps clarify financial reports and is essential for effective budgeting and forecasting.