Overhead
Expenses Setup Form
The Overhead Expenses form, available in the PJC Setup folder, lets you define codes for overhead costs that you can attribute to specific projects and whose use you want to track – for example, the rental of a trailer that you park on a construction site.
Overhead expenses, such as rent, insurance, maintenance, and salaries for administrative staff, are often necessary to perform work on contracts. Even if you cannot attribute these costs directly to a job, you need a rational method to allocate them.
There are two ways to allocate overhead in Project and Job Costing:
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If overhead varies in some proportion to a resource consumed on a project (such as equipment, labor, or materials), you can specify an overhead type and rate (or percentage) for the cost category you will use for that resource.
When you post a transaction that includes the category, Project and Job Costing automatically calculates and allocates overhead to the project in the proportion to the cost of the resource used.
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If overhead cost is traceable to specific projects, you can set up a separate overhead record for that cost. For example, if you rent office space for a project, you can set up an overhead expense record specifically for the office rental. You can then specify the overhead code in cost transactions. (You can enter the transactions using the Invoice Entry form in Accounts Payable, or the Costs form in Project and Job Costing.)
When you post cost transactions for categories that use an overhead cost class, the program applies overhead to the specified projects.