Every business leader should probably have at least a rudimentary understanding of accounting. It’s not about becoming an accountant; it’s just about knowing enough not to get fooled or fool yourself.

Allocating direct costs to production is pretty straightforward -- you know what the materials and direct labor costs. The hard part is determining the amount of overhead to allocate to finished goods ...

Discover what applied cost means in accounting, how it works with allocation rates, and see an example to understand its role ...

Overhead allocation in construction is a way to share costs across multiple jobs. Why on earth would you do that? Simple: these are the costs your projects share responsibility for anyway — they’re ...

Identify cost driver for the overhead cost, and the total amount of cost driver in a multi-product production or multi-service offering. A cost driver is a business activity responsible for change in ...

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 ...

For Android or Apple platforms Relies on banking information, regression analysis, and an accurate yearly overhead budget Produces both labor/equipment and material/subcontract rates For Android or ...

Suzanne is a content marketer, writer, and fact-checker. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies. Investopedia / Paige ...

We have recently seen an increase in audits by the Federal Energy Regulatory Commission’s (“FERC”) Office of Enforcement (“OE”) that take issue with the way electric utilities and interstate natural ...

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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 ...