Question

The project administrator is preparing a preliminary budget for a project and adds in the cost of a new computer for the project team to use. What type of cost would this computer purchase represent

Answer 1

Answer:

The correct answer is b. Direct.

Explanation:

The computer is considered a direct cost because it is essential in the development of the project. For each phase of the same it is required to analyze the information in order to outline the study, and for this reason it is considered as a resource that will be used directly until the completion of the project.

Answer 2

Answer:

Direct cost

Explanation:

A direct cost is that price which is usually tied to the production of a particular goods or services. It is essential throughout the duration of a project and is in most cases traced to the cost object. The project administrator in this case is aware of the importance of the computer for the successful completion of the project and hence adds in this cost. He added a direct cost because it can be accounted for in the production process.