Which of the following is a non-labor direct cost in construction?

Which of the following is a non-labor direct cost in construction?

• A. Wages
• B. Materials
• C. Workers' compensation
• D. Payroll taxes

Answer: (B)

The main idea is distinguishing direct costs by whether they are tied to labor or to materials/equipment used on the project. Direct costs can be traced to a specific job, and non-labor direct costs are those direct costs that are not wages or payroll-related. Materials fit this category because they are purchases of goods consumed on the job (like concrete, steel, lumber, and fasteners) and can be directly charged to the project. They are not payments for people's time, so they aren’t labor costs. Wages are direct labor costs since they represent payment for workers’ time. Payroll taxes and workers’ compensation are payroll-related expenses tied to employing labor and are typically considered labor burden rather than direct non-labor costs, so they don’t fit the non-labor direct cost category.

The main idea is distinguishing direct costs by whether they are tied to labor or to materials/equipment used on the project. Direct costs can be traced to a specific job, and non-labor direct costs are those direct costs that are not wages or payroll-related.

Materials fit this category because they are purchases of goods consumed on the job (like concrete, steel, lumber, and fasteners) and can be directly charged to the project. They are not payments for people's time, so they aren’t labor costs.

Wages are direct labor costs since they represent payment for workers’ time. Payroll taxes and workers’ compensation are payroll-related expenses tied to employing labor and are typically considered labor burden rather than direct non-labor costs, so they don’t fit the non-labor direct cost category.