Which cost category includes general and administrative contract expenses?

Which cost category includes general and administrative contract expenses?

• A. Travel expenses
• B. Direct labor costs
• C. Material costs
• D. General and administrative contract expenses are assigned to this cost category.

Answer: (D)

General and Administrative costs are indirect costs that support the business as a whole and aren’t tied to any single contract. They’re collected in the G&A cost pool and allocated to contracts using an approved G&A rate, ensuring corporate expenses are distributed across all work. That’s why general and administrative contract expenses belong in the G&A cost category. Direct labor and materials are charged directly to specific contracts as direct costs, and travel can be either direct or indirect depending on its purpose, but it isn’t the G&A pool itself.

General and Administrative costs are indirect costs that support the business as a whole and aren’t tied to any single contract. They’re collected in the G&A cost pool and allocated to contracts using an approved G&A rate, ensuring corporate expenses are distributed across all work. That’s why general and administrative contract expenses belong in the G&A cost category. Direct labor and materials are charged directly to specific contracts as direct costs, and travel can be either direct or indirect depending on its purpose, but it isn’t the G&A pool itself.