Contracts & ExecutionQuestion 195 of 1605
Which item is generally considered a direct (job) cost rather than overhead?
a.The contractor's office telephone bill
b.Annual liability insurance premium
c.The salary of the company bookkeeper
d.Lumber installed on a specific framing job
Explanation
Direct costs are traceable to a specific job — like lumber, job-site labor, and equipment rental for that job. Office phone, general insurance, and bookkeeper salary are indirect overhead.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)