Which item is generally considered a direct (job) cost rather than overhead?
Explanation
A direct (job) cost is traceable to one job — the lumber that goes into that framing job, the labour on that site, the equipment rented for it. The office telephone, the annual liability premium and the bookkeeper's salary are all incurred to run the company rather than to build any one job, so they are indirect overhead recovered through a markup spread across all jobs. The test is not whether the cost is large or recurring; it is whether you can point to the job that consumed it.
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