Which term best describes 'Overhead distributions such as G&A' in the context of S&A?

• A. Direct costs
• B. Overhead distribution
• C. Variable costs
• D. Project contingency

Answer: (B)

Overhead distribution is the mechanism for assigning indirect costs like General & Administrative expenses to projects within Selling & Administrative. These costs can’t be traced to a single project, so they’re allocated across projects using a chosen base (like labor hours or headcount). This is distinct from direct costs, which can be traced to a specific project; variable costs, which fluctuate with activity level; and project contingency, which is a reserve for uncertainty. Thus, the term that best describes overhead distributions such as G&A in S&A is overhead distribution.