Direct costs are costs directly linked with providing a particular service.

• A. Indirect overhead like marketing
• B. Taxes
• C. Costs directly linked to service
• D. Insurance

Answer: (C)

Direct costs are those that can be traced straight to delivering a particular service. They change in step with the service being provided and include items like the materials used and the wages of staff who work directly on that service, or any equipment dedicated to it. This is why the option describing costs that are directly linked to the service best captures the idea.

Indirect overhead, such as marketing, is not tied to a single service but supports the business as a whole. Taxes are business-wide obligations rather than costs tied to a specific service. Insurance generally counts as overhead because it protects the entire operation rather than a single service.