What are direct costs?

• A. Costs incurred for services for which billing rates will be established such as husbandry activities
• B. Costs associated with services regardless of whether billing rates have been established
• C. Costs incurred in the support of a researcher's specific program
• D. Costs associated with the building expenses, operation of the physical plant, and depreciation

Answer: (A)

Direct costs are expenses that can be charged directly to a specific project because they are incurred specifically for that project and have a billable rate linked to it. In practice, animal care and related services where a billing rate is established—such as husbandry activities charged per animal or per day—can be traced straight to the particular study they support, making them direct costs. This clear link to a single project is what makes them directly attributable and billable to that project.

Building expenses, the operation of the physical plant, and depreciation are classic indirect costs because they support many projects and cannot be tied to any one study with a precise billing rate. Costs described as supporting a researcher’s program can be direct if they are clearly attributable to a specific project with a defined cost object, but without a defined billing rate, assigning them directly becomes unclear, so the example with established billing rates best illustrates direct costs.