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Dual Overhead Rate Recovery is used in construction contracting as a costing equation for bidding a project, costing an existing project or allocating corporate overhead to multiple divisions of construction work. It produces two rates, 1) Labor / Equipment Rate 2) Material / Subcontract Rate.
A Allocation of costs is the transfer of costs from one cost item to one or more other cost items. Allowance - a value in an estimate to cover the cost of known but not yet fully defined work. As-sold estimate - the estimate which matches the agreed items and price for the project scope. B Basis of estimate (BOE) - a document which describes the scope basis, pricing basis, methods ...
Some indirect costs may be overhead, but other overhead costs can be directly attributed to a project and are direct costs. There are two types of indirect costs. One are the fixed indirect costs, which are unchanged for a particular project or company, like transportation of labor to the working site, building temporary roads, etc.
Overhead cost; If achieved, the split of cost helps to identify cost drivers. Direct labour and materials are relatively easy to trace directly to products, but it is more difficult to directly allocate indirect costs to products. Where products use common resources differently, some sort of weighting is needed in the cost allocation process.
In this method cost is absorbed as a percent of the labour cost or the wages. (Overhead cost/Labour cost)x 100 If the Labour cost is 5000 and the overhead cost is 1000 then the absorption cost is 20%. If the labour cost of one job is 500 it will have to absorb 20% i.e. 100 as the overhead cost making the total cost to be 600.
Adjustment and Allocation of Pension Cost 414: Cost of Money as an Element of the Cost of Facilities Capital 415: Accounting for the Cost of Deferred Compensation 416: Accounting for Insurance Cost 417: Cost of Money as an Element of the Cost of Capital Assets Under Construction 418: Allocation of Direct and Indirect Costs 419: unused: 420
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