Which of the following is listed as a direct cost?

Which of the following is listed as a direct cost?

• A. Medical expenses
• B. Revenue losses
• C. Public relations costs
• D. Inventory shrinkage

Answer: (A)

Direct costs are the expenses that can be traced directly to the incident itself. Medical expenses fit this, because they are the treatment costs incurred specifically because of the injury. The other options reflect costs that arise indirectly from an incident: revenue losses come from downtime and lost production, public relations costs cover managing the company’s image after an event, and inventory shrinkage is an asset loss related to stock rather than the immediate medical care tied to the injury. So, medical expenses are the direct cost.

Direct costs are the expenses that can be traced directly to the incident itself. Medical expenses fit this, because they are the treatment costs incurred specifically because of the injury. The other options reflect costs that arise indirectly from an incident: revenue losses come from downtime and lost production, public relations costs cover managing the company’s image after an event, and inventory shrinkage is an asset loss related to stock rather than the immediate medical care tied to the injury. So, medical expenses are the direct cost.