Which expense category covers paying for the plotter and architect's travel to the construction site, then charged to the client with a modest markup?

• A. Direct expenses
• B. Indirect expenses
• C. Reimbursable expenses
• D. Profit

Answer: (C)

Reimbursable expenses are costs the firm pays to carry out the project that are billed back to the client, usually with a small markup to cover handling and risk. The plotter purchase or rental and the architect’s travel to the construction site are out-of-pocket costs incurred specifically for this project, and the intention is to recover these expenses from the client with a modest markup. That’s what makes them reimbursable expenses.

Indirect expenses refer to overhead not tied to a single project, and profit is the firm’s overall earnings from the engagement, not a pass-through of project costs. Direct expenses are costs directly tied to the project, but the question emphasizes recovering those costs from the client with a markup, which aligns with reimbursable expenses.