Overhead costs such as administrative costs, labor overhead, miscellaneous supplies, or other costs should be considered in a job costing system to report accurate cost comparisons. The most common method of allocating overhead costs is to add a percentage to the actual direct costs. For example, a company may add a 30% overhead cost to the gross payroll to cover payroll overhead such as company taxes, benefit pay, and insurances. The payroll overhead percentage allocates costs that are not directly posted to a job. Material cost stages may add a percentage to cover company administrative costs.
An additional method of allocating overhead is to budget a specific dollar amount for administrative costs, miscellaneous supplies, or other indirect costs. Review the Stage Overhead section for details using the fixed dollar method.
Complete the following section to apply a percentage overhead to a stage.
Open a stage from a job and click on the Totals tab as shown below:
The Profit Center entry may not appear if Profit Center options are not enabled. Review the Using Profit Centers to Calculate Job Costs for more details regarding profit centers.
Enter a Percent of Cost value.
The Budgeted Overhead value should be blank unless the Add Overhead to Budget switch is ON within the stage's classification. Review the Classifications section for instructions on setting the Add overhead to Budget switch.
The Actual Overhead value is calculated by multiplying the Percent of Cost by the Actual costs found in the Totals tab.
Complete the following steps to change the Percent of Cost within multiple stages in the same job.
Right click on the Percent of Cost entry and select Filter Down from the context menu to open the following dialog:
Set the Stage option.
Select the All stages with the same classification option to copy the Percent of Cost value to stages within the job that contain the same classification.
Select the All stages option to copy the Percent of Cost value to all stages within the current job.
The other options are disabled since the dialog was opened within an existing job. Review the Globally Change Overhead Percentages section to change the Percent of Cost value within multiple jobs.
Click on the OK button to complete the changes.
Repeat the steps for each stage within a job.