Which of the following is listed as a direct cost?

Which of the following is listed as a direct cost?

• A. Physical therapy
• B. Downtime costs
• C. Lost wages
• D. Marketing expenses

Answer: (A)

Direct costs are expenses that can be traced directly to a specific incident or activity. In the case of a workplace injury, the medical treatment required to address the injury—such as physical therapy—is a direct cost because it is a concrete service tied to that injury and billed as part of its treatment. Downtime costs and lost wages relate to the impact of the injury on productivity and time away from work, so they’re considered indirect costs. Marketing expenses are unrelated to the injury and wouldn’t be categorized as injury-related costs. So, physical therapy best fits the definition of a direct cost.

Direct costs are expenses that can be traced directly to a specific incident or activity. In the case of a workplace injury, the medical treatment required to address the injury—such as physical therapy—is a direct cost because it is a concrete service tied to that injury and billed as part of its treatment.

Downtime costs and lost wages relate to the impact of the injury on productivity and time away from work, so they’re considered indirect costs. Marketing expenses are unrelated to the injury and wouldn’t be categorized as injury-related costs.

So, physical therapy best fits the definition of a direct cost.