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Select Job Cost Setup menu > Overhead Rate Maintenance.
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The true cost of a job consists of direct costs (such as material, labor, and subcontract) that can be directly associated with a job, plus a portion of indirect costs that are difficult to allocate to a specific job. Overhead is the indirect cost associated with operating expenses, such as administration, utilities, and taxes. The Job Cost system allows you to calculate and allocate indirect costs based on the direct costs posted to a job. Different overhead rates can be specified for each job type.
Use Overhead Rate Maintenance to establish overhead rates to use for each job type and cost type. These rates are used to calculate indirect expenses that cannot be directly attributed to the job (rent, utilities, etc.). Each job type and cost type can be assigned an overhead cost code and cost type for posting, and a general ledger debit and credit account number. The amount to post is determined by assigning the overhead rate, which is a percentage of your direct expenses. If you do not enter overhead rates, no automatic calculation is made. Use Job Posting Entry to post manually calculated burden and/or overhead amounts.
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