An expense which can be placed in the indirect cost rate proposal based on the following: Reasonable – A prudent person would have purchased the item and paid that price; Allocable – Expenses are at least partially applicable to a sponsored agreement. This is true for direct and indirect costs; Consistently Treated – Expenses for similar purposes must be treated the same way (throughout the university) under like circumstances; Allowable – The expense must be allowable or not specifically excluded as specified by government regulations