indirect costs


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Implicit Cost

The opportunity cost of an activity. Implicit costs are what a company or individual could have earned had a different decision been made. For example, suppose an independent consultant has two clients and she spends some time working on the first client's project. The implicit costs are what the consultant would have made had she worked on the second client's project instead. Implicit costs contrast with explicit costs, which are what someone actually spends on an activity. It is also called an indirect cost.

Indirect Cost

A cost to a business that is not directly related to making a product. For example, market research is an indirect cost because, while it may assist in making decisions about production, it does not affect the production of any one unit. Another common indirect cost is the purchase of office supplies. Indirect costs are necessary to running a business. See also: Direct cost, Overhead.

indirect costs

see OVERHEADS.

indirect costs

Costs of construction not directly related to the sticks and bricks. Examples include

• Real estate taxes
• Administrative costs
• Professional fees
• Insurance
• Lease-up expenses

References in periodicals archive ?
65 billion in gridlock , put into context this means that for every [pounds sterling]10 of direct and indirect costs caused by congestion in the UK, approximately [pounds sterling]4 occurs in the capital.
However, in this study, the direct and indirect costs of care were summed up as the economic burden.
Recommendation: The Director of the Office of Management and Budget (OMB) should bring together federal, state, and local governments, and nonprofit representatives to propose ways to clarify and improve understanding of how indirect costs should be treated, particularly for grants passed through state and local governments to nonprofits by clarifying the definitions of indirect costs and administrative costs and their relationship to each other.
This Treasury regulation characterizes licensing and franchise costs as indirect costs that are capitalized to inventory.
The logical and consistent method for the allocation of indirect costs to intermediate and final cost objectives based upon relative benefits received is required by FAR 31-201-4, "Determining allocability," and 31-203, "Indirect costs.
We need to make the operations people aware that they are most hurt by these indirect costs.
COMPONENTS OF EDUCATIONAL AND GENERAL EXPENSE BUDGETS Interest 40% Indirect Costs 11% Benefits 6% Depreciation 14% Direct Labor/Learning Support/Campus Life 21% Direct Labor/Instruction 6% Direct Labor/Institutional Support 2% Note: Table made from pie chart.
66 billion) ranked as the number one indirect cost contributor among employees with migraines, followed by short-term disability ($1.
A key point to remember is that indirect costs cannot be recovered," Lew emphasizes.
For example, to fly 100 hours a year in a Citation Excel jet under a fractional program costs about $337,000 a year in fixed and indirect costs, on top of an initial acquisition cost of $1.
But according to estimates from Cepi (the Confederation of European Paper Industries), ETS could also saddle European paper companies with huge indirect costs and leave them looking down the wrong end of a [euro]500 million addition to their annual power bills ETS could even re-shape global trade flows as cheaper imports flood into Europe.
Nearly 65 per cent of the firms surveyed said controlling indirect costs was a high priority and 90 per cent stated that they had a range of expense management policies in place.