The most significant cost for a service firm is direct labor cost.

Question

Quizplus · Accepted Answer

Direct labor cost, which includes wages, salaries, and benefits for employees directly involved in delivering services, is the most significant cost for service firms as their primary output is intangible services rendered by their employees. Other costs such as overhead, supplies, and materials are still relevant but typically have a lower impact on overall costs compared to direct labor cost.

The Most Significant Cost for a Service Firm Is Direct