Which of the following is an example of an allowable direct cost and an unallowable direct cost under a federal grant?

• A. Allowable direct: travel; Unallowable direct: salaries.
• B. Allowable direct: office supplies; Unallowable direct: equipment depreciation.
• C. Allowable direct: marketing; Unallowable direct: personnel salaries.
• D. Allowable direct: salaries for personnel working on the project; Unallowable direct: alcohol expenditures or lobbying costs.

Answer: (D)

The key idea is how costs are categorized for a federal grant: what can be charged directly to the project versus what cannot. Salaries for personnel working on the project are a classic example of an allowable direct cost because the labor is essential to the grant work and its time can be directly traced to the project. On the other hand, certain expenses are explicitly unallowable for direct charging to federal awards, including alcohol expenditures and lobbying costs. So the combination that shows project personnel salaries as allowable and alcohol or lobbying costs as unallowable reflects the standard rules: payroll for project staff can be charged directly, while alcohol and lobbying cannot.