Cost allocations using the direct labor method of accounting work the best when a business produces only one or two types of products. Using this traditional method of determining a company's labor ...

From clean toilets to working computers, your company incurs many costs that it cannot assign to one particular "cost object" -- a product, project, department or service. You must nonetheless cover ...

Discover how Activity-Based Costing (ABC) allocates overhead costs to products, enhancing cost precision and pricing strategies with real-world examples.

Overhead allocation is a source of great disagreement in our industry. Should the allocation be based on job price? On job cost? Per project? Or per field man-hour. We understand the pros and cons of ...

One of the most common financial issues I find contractors dealing with is properly determining what it costs them to be in business. Without that proper financial foundation, any pricing calculated ...

Entrepreneurs, small business owners and managers need accurate, timely financial data to run their operations. Specifically, understanding and connecting costs to items or departments helps them ...

Last month, we provided an article on overhead calculation and rate. That was Overhead Rates 101. In this month’s guest column, Ken Hedlund, Somerset CPAs (somersetcpas.com), introduces a more ...

Overhead rate is a measure of a company's indirect costs relative to another input or metric. Learn how overhead rate is calculated and why it's important to track. Overhead rate is a ratio of a ...