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.

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 ...

Small businesses that use job-order costing systems need to determine an allocation base to apply manufacturing overhead to jobs. Manufacturing overhead costs, those costs that are not directly ...

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 ...

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 ...

Most conversations about overhead turn out to be complicated and emotional. People are confused about how it is defined, how it is calculated, and above all, how it is recovered. Everyone does it ...

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 ...

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