Which of the following is NOT considered a direct cost in cost estimation?

In cost estimation, direct costs are expenses that can be directly attributed to a specific project or activity. These typically include costs for labor, materials, and other expenses that directly contribute to the production process or project completion.

Labor is a direct cost because it involves the salaries and wages of employees who are directly working on the project. Materials also qualify as direct costs since they include the tangible goods that are physically incorporated into the finished product.

Utility costs, while they may seem like overhead or indirect expenses, can sometimes be classified as direct costs if they are specifically tied to the operation of a project, like the electricity consumed for machinery used exclusively for a particular job.

Insurance, on the other hand, is generally considered an indirect cost. This is because insurance expenses typically cover a broader array of risks and are not directly tied to any single project or direct expense. They are often allocated across multiple projects or considered overhead, making them less directly attributable to specific activities.

Therefore, insurance is the correct answer, as it does not fit the criteria for a direct cost in cost estimation.