Learn how to successfully estimate overhead rates and labor costs while identifying cost pools.
Accounting regulations require an allocation of costs to construction projects. Often contractors are not sure what costs are to be allocated to jobs. This information will explain in depth how to separate all the relevant construction costs you incur and how to allocate these separate costs as overhead to construction projects. The material will walk through the key cost identification steps in this process and will show you a methodology to use on how to allocate those costs to specific projects. Learn how to identify cost pools to consider for the allocation and discuss various cost pools you can use to allocate as overhead to your projects. This material will walk through a couple of case studies to show you the impact of improper and proper cost allocation as you look to improve the potential profitability on your jobs. This information will provide a clear understanding of the specific costs to allocate to jobs, how those costs can be organized by pools and a methodology you can utilize to improve profitability on all your jobs.
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Why Lorman?
Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
Let's Identify the Costs to Be Considered
- What Are Direct Costs?
- What Are Indirect Costs?
- What Are General and Administrative Costs?
What Options Do We Have for Allocating Costs?
- Why Is an Accurate Budget Important?
- Analyzes the Relationships Between the Statements Balance Sheet and P&L
- Financial Integrity Is Key
- It Is the Report Card
- Allows You to Fight Your Cost Structure
- How Do We Identify Cost Pools?
- Labor
- Equipment
- Operating Costs
- Materials Handling
- Other
- Where Are the Challenges?
- How Do We Apply Profit to Jobs?
- Understanding Pricing Models
- Understanding Cost Structure
- The Dual Overhead Recovery Method
Case Studies
- Real World Calculations
- Applying Profit to a Job
- Summary Work Sheet With Case Studies
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Why Lorman?
Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last revised on April 8, 2020.
Call 1-866-352-9540 for further credit information.
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
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Why Lorman?
Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Theran J. Welsh, CPA
SVA Certified Public Accountants
- Partner with the SVA Certified Public Accountants group since 2005
- Sole focus is on helping contractors create shareholder value, understand their cost structure to properly bid and win profitable work and assure their tax structure is a model that supports a sustainable organization
- Thorough understanding of the contractor client’s acceptance of risk as most contractors do not go out of business on one job, usually it is a combination of trying to do too much with too little resources and being too impatient to take the time upfront in negotiating a contract and reducing risk integral to contract management
- Experience can help financial executives of companies focused on executing demanding projects, deliver them on time, consistent with the contract they entered into with the customer to achieve a win-win solution for both parties
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Why Lorman?
Over 34 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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