Grant Writing FREE Grant Writing Grant Budget Formulation Questions and Answers 2

Question 1

When preparing a grant budget, which cost category typically includes expenses such as office rent, utilities, and administrative staff salaries?

Accepted Answer

Indirect costs

Answer

Direct costs

Answer

In-kind contributions

Answer

Cost sharing

Question 2

What is the primary purpose of a budget justification narrative in a grant proposal?

Accepted Answer

To explain why each budget line item is necessary and how costs were calculated

Answer

To list all personnel involved in the project

Answer

To summarize the project's expected outcomes

Answer

To provide the organization's financial history

Question 3

A federal grant application requires a 20% cost share. If the total project cost is $500,000, how much must the grantee contribute from non-federal sources?

Accepted Answer

$100,000

Answer

$80,000

Answer

$120,000

Answer

$150,000

Question 4

Which federal regulation establishes the principles for determining allowable costs under federal grants?

Accepted Answer

2 CFR Part 200 (Uniform Guidance)

Answer

OMB Circular A-21

Answer

FAR Part 31

Answer

26 CFR Part 1

Question 5

What distinguishes a modified total direct cost (MTDC) base from a total direct cost base when calculating indirect costs?

Accepted Answer

MTDC excludes equipment, capital expenditures, and subaward amounts exceeding $25,000

Answer

MTDC includes all costs without any exclusions

Answer

MTDC only applies to state-funded grants

Answer

MTDC excludes personnel costs from the calculation

Question 6

In a multi-year grant budget, what is the most appropriate method for projecting personnel costs in future years?

Accepted Answer

Apply an annual escalation rate based on historical salary increases

Answer

Keep salaries identical across all years

Answer

Double the salary each year to account for inflation

Answer

Use the minimum wage rate for all positions