2. Overhead Allocation Melissa Wood

3. Choosing a Method Using Actual Burden Using Actual Burden with Extra Burden General Ledger Method Job Costing Method

4. What is Actual Labor Burden? Employer share of FICA Federal and state unemployment Workers' compensation Employer-paid benefits from unions Accrued fringe benefits (Heath & 401K) Contributions

5. Items Considered Extra Burden Fuel General liability insurance Vehicle insurance & maintenance costs Licenses and registration Blueprints & estimating costs Tools & small equipment Drug & background check fees Shop costs Field phones & mobile devices

6. Burden Analysis Review current actual burden setup Set extra burden gl accounts to indirect expenses Analyze income statement for extra burden % Adding new G/L accounts to track extra burden Setting your extra burden sequence Adding higher burden to more costly jobs Execute when posting payroll Over/Under burdening spot check

7. This company has under – burdened by about 7%

8. General Ledger Method Conceptually similar to the extra burden method Setup is in the G/L rather than payroll Great solution if you are not using payroll module Setup in general chart of accounts Consider basis, % to allocate, and weight factor Make sure G/L Control File is set Executing using the Overhead Allocation Report Con – does not work with divisions

9. Job Cost Method Conceptually similar to the other methods Set up in the Job Cost Control File Basis is by cost code or cost class Allocation-Amount Per Hour or % Make sure J/C Control File is set Execute using the J/C Overhead Allocation Report Use Caution to keep G/L & job cost in balance Con – Only hits job cost (not G/L)

10. Thank You!