When an agency is developing a fee to recover costs for providing a service, it must calculate the full cost of the service. According to cost accounting standards for federal government operations, “full cost” includes:
Direct costs: staffing, supplies, materials directly used in service provision
Indirect costs: facility costs (e.g., location rent), equipment depreciation, administrative support, etc.
OMB Circular A-25, “User Charges,” requires that user fees for government services be based on the full cost of providing that service unless otherwise mandated by law. Therefore, staffing (a direct cost), location rent (indirect cost), and equipment depreciation (a capital asset cost) are all appropriate to include.
Relevant Standards and References:
OMB Circular A-25, “User Charges,” Section 6(d): “Full cost includes all direct and indirect costs to any part of the Federal Government of providing a good, resource, or service.”
FASAB SFFAS No. 4, Managerial Cost Accounting Concepts and Standards: Defines full cost components, including depreciation.
GAO “Principles of Federal Appropriations Law,” Red Book, Vol. I: Cost recovery practices in federal user fee settings.
Therefore, Option B is correct.