Depreciation of equipment is categorized as which type of cost in the budgeting framework?

• A. Direct costs
• B. Internal support costs
• C. Indirect costs
• D. None of the above

Answer: (B)

Depreciation of equipment is treated as an internal support cost because it represents the allocation of the long-term investment in infrastructure that benefits multiple activities, not a cost tied to a single project. When you purchase equipment, its cost is spread over its useful life through depreciation, reflecting that the asset supports many experiments and programs over time. This makes depreciation a shared, overhead-type expense rather than a direct cost assigned to one specific study.

Direct costs are those you can clearly link to a particular project (like a specific batch of reagents or staff working only on that project). Indirect costs (overhead) cover essential running expenses like facilities and administration; depreciation sits with internal support since it funds the broad infrastructure that enables operations across programs. None of the above wouldn’t fit because depreciation clearly relates to shared assets, not a single, isolated expense.