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


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 ?
For more than six decades, the federal government has been reimbursing universities for indirect costs alongside direct costs.
The CPA firm must have completed 25 FAR indirect cost rate audits over the
If organizational leaders want to measure indirect costs, then they have to know the processes of the departments sufficiently to understand and link the indirect costs with their consumption during the production of the good or service.
2013-231, the Fifth Circuit affirmed the Tax Court's decision that a custom homebuilder was a producer subject to the UNICAP rules and was required to capitalize officers' compensation and other costs as indirect costs incurred related to production activities.
Indirect costs or productivity losses are the labour earnings that are forgone as a result of an adverse health outcome.
The accounting system should include a timekeeping system that identifies employees' labor indirect costs and/or direct costs to a particular contract.
For the Council, the impetus was to ensure that higher education institutions, NGOs and other public bodies which had benefited from the AC model would not lose out, leading it to develop a simplified approach,' which would allow such participants to work out their approximate indirect costs and, so long as these were then signed off by an auditor as being credible, have them used as the basis for calculating the flat rate.
Few people consider indirect costs of an accident," says Jeffrey J.
EUROPEAN Commission rules on the award of Euratom research grants under the European Union's incoming Seventh Framework Programme (FP7) suggest grant recipients can recover audited indirect costs.
The Monetary Control Act of 1980 requires that the Board establish fees for priced services provided to depository institutions to recover, over the long run, all direct and indirect costs actually incurred as well as imputed costs that would have been incurred, including financing costs, taxes, and certain other expenses, and the return on equity (profit) that would have been earned if a private business firm provided the services.