Which of the following is listed as a direct cost?

Which of the following is listed as a direct cost?

• A. Increase in workers' compensation premium
• B. Employee training costs
• C. Community outreach
• D. Advertising

Answer: (A)

Direct costs are those expenses that can be traced to a specific cost object, such as a project or activity, and vary directly with that object’s level of activity. An increase in workers’ compensation premium fits this idea because it arises from the company’s employees’ injury risk and is charged specifically to the organization as a consequence of that risk. It is tied to the safety and risk profile of the workforce, making it a cost that can be allocated to safety-related outcomes. In contrast, training costs, community outreach, and advertising are more general supports that aren’t tied to a single cost object or incident, so they’re typically treated as indirect costs.

Direct costs are those expenses that can be traced to a specific cost object, such as a project or activity, and vary directly with that object’s level of activity. An increase in workers’ compensation premium fits this idea because it arises from the company’s employees’ injury risk and is charged specifically to the organization as a consequence of that risk. It is tied to the safety and risk profile of the workforce, making it a cost that can be allocated to safety-related outcomes. In contrast, training costs, community outreach, and advertising are more general supports that aren’t tied to a single cost object or incident, so they’re typically treated as indirect costs.