What are indirect costs vs. direct costs?
Direct costs are those costs (salaries, fringe benefits, contracted services, travel, etc.) that can be identified specifically with a particular sponsored project, an instructional activity, or any other educational activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Facility and Administrative (F&A) costs, formally called indirect costs, are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, instructional activity, or any other school activity. These costs are allocated to the direct activities through the use of the indirect cost rate. Examples of indirect costs are operation and maintenance costs, depreciation expenses, utilities, and various administrative costs.
