What is an example of a project indirect cost?

In the context of construction projects, indirect costs are expenses that are not directly attributable to a specific project but are necessary for the overall operation and management of the project. The correct choice of temporary toilets at the job site is an example of an indirect cost because while these facilities are necessary for the labor force working on site, they are not directly tied to a specific construction task or deliverable.

Indirect costs can include various overhead expenses that support the project but do not directly contribute to the physical construction work itself. In a construction setting, costs like temporary toilets are essential for maintaining a functional and compliant work environment, thereby facilitating the productivity of direct labor.

Other choices illustrate costs that might seem like indirect expenses but play different roles. Office equipment and lease payments for office space are typical indirect costs as they are not tied directly to project execution but support project personnel and administration. Utility bills at headquarters similarly fall under indirect costs related to the overall office operations. However, the specific environment of the job site with regards to temporary toilets clearly aligns with the requirements for worker accommodation and site management, illustrating why it stands out in this case.