New business owners sometimes have difficulty setting up the initial budget for a company. Errors in the budget may result in failure of the business, regardless of how well your product serves the ...

Allocating direct costs to production is pretty straightforward -- you know what the materials and direct labor costs. The hard part is determining the amount of overhead to allocate to finished goods ...

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 ...

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 ...

As a former corporate controller and senior vice president of operations, I have experienced both sides of allocated overhead. I have learned manufacturing executives have more control over costs ...

The most common mistake is allocating overhead as a percentage of job cost. This practice is so universal that we rarely meet a contractor who veers from it. For example, assume a painting contractor ...

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.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...