Question

Which of the following are direct costs?

a. legal costs
b. marketing costs
c. insurance costs
d. subcontractor costs

Answer 1

Subcontractor costs are direct costs, while legal costs, marketing costs, and insurance costs are indirect costs. Correct option is d.

Step-by-step explanation:

Direct costs are expenses that can be specifically traced to a particular product or service. Among the options given, subcontractor costs are direct costs because they are directly incurred for the production of a specific product or completion of a specific service.

On the other hand, legal costs, marketing costs, and insurance costs are considered indirect costs. While these expenses are necessary for the overall operation of a business, they cannot be easily attributed to a specific product or service.