How do researchers apply specific dollar values to "in kind"
contributions (from their institution or others) in funding
applications for research grants? ie. What kind of formulae do they
apply or what factors do they take into account? Is there any formal
convention?

I am specifically interested in laboratory bench space and analytical
equiptment use (eg. a gas chromatograph-mass spectrometer, GC-MS),
though I am prepared to accept a more general answer which need not
address these specifically.