Direct & Indirect Cost in Retail Essay Example
Indirect Cost Rate Questions and Answers
What is an indirect cost?
Indirect costs represent the expenses of doing business that are not readily identified with a particular grant, contract, project function, or activity, but are necessary for the general operation of the organization and the conduct of activities it performs. In theory, costs like heat, light, accounting, and personnel might be charged directly if little meters could record minutes in a cross-cutting manner. However, this is not practical; therefore cost allocation plans or indirect cost rates are used to distribute those indirect expenditures. Typically, salaries and expenses for auditing, budgeting, payroll, personnel, purchasing, etc. are examples of costs that are considered to be indirect costs.
What is the indirect cost rate?
The indirect cost rate is the maximum percent of dollars the district can expend from state and federal grants for administrative costs. Indirect cost rates (limits) ensure that state and federal moneys are expended for intended uses and for allowable costs, including expenditures directly traceable to the program (direct expenditures) plus a limited allowance for overhead or indirect expenditures. A “fixed with carry-forward” indirect cost rate is calculated for each district for all of its restricted federal grants and another “fixed with carry-forward” indirect cost rate is calculated for all of its unrestricted federal grants. Rates are individually computed for each district and are unique to each district.
What does fixed with carry-forward mean?
A fixed with carry-forward provision is a rate computed and fixed for a specified future period based on an estimate of that period’s level of operations. However, when the actual costs of that period become known, the difference between the estimated costs and the actual costs is carried forward as an adjustment to a subsequent period for which a rate is established. Indirect rates calculated on the
What is an indirect cost?
Indirect costs represent the expenses of doing business that are not readily identified with a particular grant, contract, project function, or activity, but are necessary for the general operation of the organization and the conduct of activities it performs. In theory, costs like heat, light, accounting, and personnel might be charged directly if little meters could record minutes in a cross-cutting manner. However, this is not practical; therefore cost allocation plans or indirect cost rates are used to distribute those indirect expenditures. Typically, salaries and expenses for auditing, budgeting, payroll, personnel, purchasing, etc. are examples of costs that are considered to be indirect costs.
What is the indirect cost rate?
The indirect cost rate is the maximum percent of dollars the district can expend from state and federal grants for administrative costs. Indirect cost rates (limits) ensure that state and federal moneys are expended for intended uses and for allowable costs, including expenditures directly traceable to the program (direct expenditures) plus a limited allowance for overhead or indirect expenditures. A “fixed with carry-forward” indirect cost rate is calculated for each district for all of its restricted federal grants and another “fixed with carry-forward” indirect cost rate is calculated for all of its unrestricted federal grants. Rates are individually computed for each district and are unique to each district.
What does fixed with carry-forward mean?
A fixed with carry-forward provision is a rate computed and fixed for a specified future period based on an estimate of that period’s level of operations. However, when the actual costs of that period become known, the difference between the estimated costs and the actual costs is carried forward as an adjustment to a subsequent period for which a rate is established. Indirect rates calculated on the