Which of the following is NOT considered an indirect cost?

Indirect costs are generally understood as expenses that are not directly attributed to a specific project or task but are necessary for the overall operation of an organization. These include costs like insurance, marketing, and supervision, as they contribute to the general functioning and administration of the business without being directly tied to a single product or service.

In this context, supervision falls under indirect costs since it supports the general oversight of operations rather than being linked to a specific product or project. Supervision is essential for managing employees and maintaining productivity across various tasks and projects but does not produce a direct output on its own.

On the other hand, materials are classified as direct costs because they are specifically tied to the production of goods or delivery of services. They can be directly tracked and allocated to specific projects or products, distinguishing them from indirect costs.

Understanding these classifications helps in budget management and financial reporting, ensuring that organizations allocate their resources effectively.