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 ...

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 ...

We lost a little bit, but the job still made money.” As a construction business owner, you know that “making money” at the project level does not necessarily equate to a profit on the project after ...

The most common mistake is allocating overhead as a percentage of job cost. This practice is so universal that we rarely meet a contractor who veers from it. For example, assume a painting contractor ...

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 ...

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 ...