John is the project manager for the ABC project. He is finalizing the budget of the project. He is concerned about the direct costs involved in the project. Which of the following can be considered…

The correct answer is C. Subcontract cost. Direct costs can be traced directly to a cost object such as a product. In other words, direct costs do not have to be allocated to a product, department, or other cost object. For example, if a company produces Chairs, the cost of the wood and the cost of the carpenter are…

Schedule Planning and Development

Question

John is the project manager for the ABC project. He is finalizing the budget of the project. He is concerned about the direct costs involved in the project. Which of the following can be considered a direct cost in the project?

Options

ACost of electrical utilities
BSalaries of management directly involved in the project
CSubcontract cost
DAccounting support cost

How the community answered

(30 responses)

B
3% (1)
C
93% (28)
D
3% (1)

Explanation

Direct costs can be traced directly to a cost object such as a product. In other words, direct costs do not have to be allocated to a product, department, or other cost object. For example, if a company produces Chairs, the cost of the wood and the cost of the carpenter are direct costs. These costs are traceable by the production department. On the other hand, the rent of the production area, warehouse, and office is not a direct cost. Answer options A, D, and B are incorrect. These are examples of indirect costs.

Topics

#direct costs#project budget#cost types#subcontract cost

Community Discussion

No community discussion yet for this question.

Full PMI-SP Practice