Hi I understand that direct costs are deducted from income in order to calculate gross profit. Looking at a tax return that an accountant did for me, I'm a bit puzzled about what constitutes a direct cost, I think I understand that these direct costs are dependant and proportional to the amount of income - i.e. the more items you sell, the higher these costs will be, as opposed to fixed overheads like heating and water and rent which doesn't change, or advertising which can be whatever you choose to spend. In an internet sales business, in order to actually sell the product there is cost of stock cost of shipping to get stock from supplier cost of shipping to send stock to customer cost of packaging
These things my accountant included in direct costs - but he didn't include the fees I have to pay for accepting electronic payments - these are proportional to takings and necessary also.
Is there any particular reason why these would not have been included as a direct cost?
Thank you.