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 ...

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 ...

Proper job costing includes all costs associated with a job They include materials, labor, permits, subcontractors, equipment rentals and overhead costs applied to the job How do we allocate the ...

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 ...