Which would be an example of administrative costs if you're a project - ProProfs Discuss
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Which would be an example of administrative costs if you're a project manager for a large manufacturing company and you are creating an initial budget for your new project?



A. Training;
B. Vendor fees;
C. Building leases;
D. Contractor salaries.
Asked by Arianna, Last updated: Aug 27, 2019

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2 Answers

B. Mclean

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B. McleanSales Manager, MBA, Ewa
Sales Manager, MBA, Ewa

Answered on Feb 26, 2019

Letter C would be the best answer among the choices. Administrative expenses are sets of costs needed by a company to administer a business that is not related to the sales of goods and services or constructions. This is required in determining the fixed cost of a business’ new project.

Not all projects need training as they can repurpose the previous training materials used. Some projects might even need to have various training that has different fees. The contractor salaries and vendor fees are under a different branch of the company that is not the job of the project manager. The building lease is an administrative expense as it is fixed and will not contribute to sales or make the company any profit.

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John Smith

John Smith

Answered on Sep 09, 2016

Building leases;-building leases would be an example of administrative costs. costs are often categorized as either direct or indirect. administrative costs, which fall under the indirect costs category, include costs for normal operation of the business, but are not directly related to the project. because the facilities are necessary for normal operations, the building leases would be considered administrative costs. training, vendor fees, and contractor salaries would all be associated with the project, and therefore, would not be administrative costs. costs directly related to a project are considered project costs or direct costs.
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