Prospect Budget Training 254 Practice Test

Which of the following best describes the role of G&A in S&A charges?

An overhead distribution A direct material cost A project contingency A site safety expense

Correct Answer:

An overhead distribution

Explanation:

G&A costs are indirect expenses that support the entire organization rather than a single project. In budgeting, Selling and Administrative charges include overhead that must be spread across projects to reflect shared services. This overhead distribution accounts for corporate functions such as executive leadership, accounting, HR, IT, and facilities. Since these costs benefit multiple projects, they aren’t tied to a particular material or activity, so they’re allocated as an overhead distribution within S&A charges. Direct material costs are tangible materials used for the project. A project contingency is a separate reserve for uncertain costs. A site safety expense is a project-specific spending item that directly relates to on-site safety.

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