CIPS L4M5 Exam - Topic 9 Question 92 Discussion

Actual exam question for CIPS's L4M5 exam

Question #: 92
Topic #: 9

[All L4M5 Questions]

A building firm has been awarded a contract to build a new office block, and the

building firm needs to separate its direct and indirect costs.

Which one of the following is a direct cost to the building of the new office block?

ACost of materials

BCost of legal fees

CCost of insurance

DCost of office space

Show Suggested Answer

Suggested Answer: A

by Keneth at Jan 05, 2026, 05:16 AM

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Timothy

2 months ago

Definitely A. Direct costs are what you see on-site, like materials. Makes sense!

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Lou

3 months ago

Right! Insurance costs also fall under indirect. They protect the project, not build it.

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Vallie

3 months ago

Agreed, Jacklyn. Legal fees are indirect. They support the project but aren't directly tied to building.

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Jacklyn

3 months ago

I think A) Cost of materials is the direct cost. It’s essential for construction.

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Samira

3 months ago

D) Cost of office space seems like it could be direct too!

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Claribel

3 months ago

B) Cost of legal fees should be indirect, right?

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Isadora

3 months ago

Wait, are legal fees really indirect? Seems odd.

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Jestine

4 months ago

Totally agree, materials are essential for construction!

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Mireya

4 months ago

A) Cost of materials is definitely a direct cost.

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Audra

4 months ago

Haha, the cost of office space? That's a good one! Clearly, that's an indirect cost.

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Lisha

5 months ago

Hmm, I'm not sure about that. Wouldn't the cost of legal fees or insurance also be considered direct costs?

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Marica

5 months ago

I agree, the cost of materials is a direct cost that should be included.

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Adelaide

5 months ago

A) Cost of materials is definitely a direct cost for the building project.

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Stevie

5 months ago

Definitely leaning towards A) Cost of materials, but I wonder if they could argue about the office space being direct as well.

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Linette

5 months ago

I feel like insurance might be indirect too, but I can't recall exactly how they categorize those costs.

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Onita

6 months ago

I'm not entirely sure, but I remember a similar question where legal fees were considered indirect costs.

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Graham

6 months ago

I think the direct cost would be the cost of materials since they are directly used in the construction.

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Myrtie

6 months ago

The cost of materials is definitely the direct cost here. The other options like legal fees and insurance seem more like overhead or indirect costs to me.

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Kathryn

6 months ago

I'm not totally sure about this one. The cost of office space seems like it could be a direct cost, but I'm not confident. Guess I'll have to think it through carefully.

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