A construction project has the following costs: Direct materials $125,000, Direct labor $85,000, Equipment rental $15,000, Project management salary $12,000, and Company headquarters rent $8,000. What are the total direct costs for this project?
Correct Answer
A) $225,000
Direct costs are those directly attributable to the project: Direct materials ($125,000) + Direct labor ($85,000) + Equipment rental ($15,000) = $225,000. Project management and headquarters rent are indirect costs.
Why This Is the Correct Answer
Direct costs are those directly attributable to the project: Direct materials ($125,000) + Direct labor ($85,000) + Equipment rental ($15,000) = $225,000. Project management and headquarters rent are indirect costs.
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