Pricing and Cost Accounting, 3rd Edition

 

CHAPTER 5Principles—Selected Costs

Part 31 of the FAR states that costs shall be allowed to the extent that they are reasonable, allocable, and allowable under certain specific provisions. FAR Section 31.205 covers the allowability of 51 specific cost elements. This chapter focuses on those cost elements that involve complex ideas or are specific to government contracting, and are therefore most likely to need clarification.

GENERALLY UNALLOWABLE COSTS

The following categories of cost are generally unallowable under FAR 31.205.

Public Relations and Advertising Costs (31.205-1)

Generally, public relations and advertising costs relating to sales promotion are unallowable because the government procurement system generates sales through direct ...