Companies use cost allocation to accurately determine the costs associated with production. Cost allocation tells the company what it spends on overhead during production process so accounting ...

It takes more than raw materials and shop workers to manufacture products. Factories need power, supplies and employees whose functions are essential to the operation even though they aren't part of ...

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 ...

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 ...

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 ...

Implementation of full cost accounting in FY 2004 created problems for NASA’s research Centers when a complex allocation of overhead costs disproportionately inflated their costs compared to the ...