Hi musicprnt: To explain the normal overhead charges: These are computed as a flat fraction of the direct costs of the research, with a few exclusions. Direct costs include faculty salary (summer only, in many places), grad student salary, post-doc salary, technician salary (if the grant has one) plus items like equipment (usually no overhead), supplies, travel, computer costs, etc.–the things the faculty member has to arrange to pay for to conduct the research. Personnel costs tend to be the bulk of the direct costs of many grants, and definitely the bulk of the overhead-generating direct costs. The overhead is a fixed percent of the direct costs.
So suppose at the University of Utopia the faculty make three times what I make, the post-docs make three times what my post-doc makes, and the grad students make three times what my grad students make. At the same overhead percent rate (say 55%, just for illustration), the amount generated in overhead at the University of Utopia will already be three times the amount generated by the same personnel expenditures at my university. By the “same personnel expenditures,” I mean the same person-hours, by researchers working at the same level. The only reason that the University of Utopia would need a higher overhead rate as a percentage, to cover higher local costs, is if they pay their accountants more than three times the salary that we pay our accountants.
Some universities have different rates for research that involves laboratory animals, because the costs to the institution are higher. The costs of disposal of toxic wastes and biohazards are included in the general overhead rate (I am pretty sure), which is a flat per cent charge to all grants–so it applies to researchers in quantum mechanics (for example) who generate zero toxic waste in the course of their research.