Which of the following is considered a direct cost in business?

Labor is indeed considered a direct cost in business because it is directly tied to the production of goods or services. Direct costs are expenses that can be directly attributed to a specific project, product, or service, and labor costs include wages and salaries for employees who are directly involved in the production process. For instance, workers on an assembly line or technicians in a plumbing installation are essential components of producing the services or products that the business offers, making their compensation a direct cost.

In contrast, rent, utilities, and advertising are typically categorized as indirect costs. Rent is a fixed expense that supports the overall operations but is not directly tied to a specific product or service. Similarly, utilities, while essential for maintaining the business's functionality, do not directly connect to the production process. Advertising costs support the business's marketing efforts and drive sales but cannot be directly linked to the manufacturing of a product or the provision of a service in the same way labor costs can. Hence, labor stands out as the clear choice for a direct cost in business operations.