Question

What does the term “Direct Rate” mean? What does the term “Burden Rate” mean? Can you give an example? (Project Management)

Answer 1

Direct Rate - In terms of project management, direct cost is the cost associated with attributes that are directly associated with project activities and they are labor, raw materials, rental cost, equipment cost, etc.

Burden Rate - burden Rate is the rate of allocation at which the indirect costs are allocated to the direct costs that ate related to labor and inventory as well that include the raw materials, cost of finished products, etc.