Which item is normally considered a direct cost?

Which item is normally considered a direct cost?

• A. Structural steel
• B. Job trailer
• C. Insurance
• D. Payroll clerk

Answer: (A)

Direct costs are expenses that can be traced and charged to a specific project because they are consumed by that project. Structural steel fits this, since it is a material purchased for the job and its cost can be directly assigned to the project budget. The other items are typically treated as indirect costs or overhead: a job trailer serves as a site facility used by the whole site and its cost is allocated as site overhead; insurance is usually an indirect cost covering broader risk, not a single unit of work; and a payroll clerk provides administrative support across multiple projects, so their salary is overhead rather than a direct project cost.

Direct costs are expenses that can be traced and charged to a specific project because they are consumed by that project. Structural steel fits this, since it is a material purchased for the job and its cost can be directly assigned to the project budget. The other items are typically treated as indirect costs or overhead: a job trailer serves as a site facility used by the whole site and its cost is allocated as site overhead; insurance is usually an indirect cost covering broader risk, not a single unit of work; and a payroll clerk provides administrative support across multiple projects, so their salary is overhead rather than a direct project cost.