Conversely, direct costs can be allocated to a specific cost objective with a high degree of accuracy. For instance maintenance on a HVAC system may improve the air quality in many laboratories and offices in one building. The OMB defines Indirect costs as “costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives.” Such costs are not directly allocable to one specific project because the indirect costs support multiple projects. Indirect Costs (Facilities and Administrative Costs, F&A) For example, the supplies needed for a research project are easy to identify, as are the salaries of the individuals who will work on the project and travel expenses for those individuals. Direct costs are those which can be identified specifically with a particular sponsored project and which can be directly assigned to such activities, relatively easily and with a high degree of accuracy.
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