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.

Activity-based costing is an improved method for allocating overhead costs. Instead of using one factor for cost allocation, this new method focuses on different aspects of the production process and ...

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 ...

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 ...

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 ...

There are many costs associated with running a business, but all of those costs don’t fall into the same bucket. One type is overhead costs, which are expenses not tied directly to the production of a ...

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 ...

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 ...

Overhead rate is a measure of a company's indirect costs relative to another input or metric. Learn how overhead rate is calculated and why it's important to track. Overhead rate is a ratio of a ...

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 ...