Project Management Professional (PMP) Exam Practice – Question1415
You must consider direct costs, indirect costs, overhead costs, and general and administrative costs during cost estimating. Which of the following is NOT an example of a direct cost?
A. Salary of the project manager B. Subcontractor expenses C. Materials used by the project D. Electricity
Correct Answer: D
Explanation:
Explanation:
Direct costs are incurred for the exclusive benefit of a project (for example, salary of the project manager, materials used by the project, and subcontractor expenses). Indirect costs, also called overhead costs, are allocated to a project by its performing
organization as a cost of doing business. These costs cannot be traced to a specific project and are accumulated and allocated equitably over multiple projects (for example, security guards, fringe benefits, and electricity).