Direct Costs vs Indirect Costs

Direct Costs

• Costs that can be directly attributed to a specific project
• Included in the project budget
• Examples:
  • Labor costs
  • Materials costs
  • Resource costs

Indirect Costs

• Costs that cannot be directly attributed to a specific project
• May or may not be included in the cost estimate
• Basis of Estimates tell whether indirect costs are included in the project budget
• Examples:
  • Management costs
  • General administration costs
  • Building rental
  • Utility costs