Use the General tab to control how overhead expenses are allocated to your regular
projects.
Contents
Field | Description |
Scope
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The procedure that you select tells
DPS whether or not to allocate overhead as well as how to allocate the expenses. Select one of the following:
-
Company-wide — Overhead Allocation distributes one pool of overhead to regular
projects and
tasks to which direct
labor or revenue has been charged during the accounting year.
-
Organization — Overhead Allocation distributes separate pools of overhead from non-operating
organizations to operating
organizations.
DPS then distributes overhead to
projects and
tasks to which direct
labor or revenue has been changed during the accounting period. If you select this method, no other information is required for overhead allocation. However, the
Basis field can be used by Key Financial Metrics to calculate actual overhead rate and
Overhead Rate can be used for burden calculations. Setup is done for each individual
organization.
-
None —
DPS does not allocate overhead. If you select this option, no other information is required. The remaining fields, except
Overhead Rate, are disabled. You can, however, use
Overhead Rate for burden calculations. You would usually not allocate overhead if your enterprise job costs using billing rates. It is rare for an enterprise to select this method. You would not allocate overhead if your enterprise job-costs using billing rates or does gross margin reporting (comparing revenue to direct
labor, direct expenses, and reimbursable expenses).
Deltek recommends that you allocate overhead to analyze
project performance.
|
Method
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This field is required if the scope is
Company-wide. The method you select determines how
DPS allocates expenses. Overhead is the sum of an enterprise’s indirect expenses, such as vacation pay, sick time, rent, utilities, office supplies, and administration. Normally, you distribute company-wide overhead costs to all regular
projects so that each
project absorbs a share of the expenses. Select one of the following:
-
Assign —
DPS allocates overhead on a year-to-date basis to regular
projects based on a specified percentage of each
project’s direct
labor or revenue, not on the enterprise’s actual overhead costs. Because you select the specified percentage, this method generates a consistent overhead number. However, the number is not a true overhead number.
-
Prorata (proration) —
DPS allocates on a year-to-date basis to regular
projects based on a percentage of the enterprise’s actual year-to-date indirect expenses to each regular
project. This method generates a true overhead number but will fluctuate.
|
Basis
|
Select one of the following settings:
-
Direct
Labor — This indicates that you want to base your overhead allocation on your direct
labor, including regular hours and overtime hours. For every dollar of direct
labor, a certain percentage of overhead should be assigned. Therefore, more
labor-intensive
projects receive more overhead.
-
Revenue — This indicates that you want to base your overhead allocation on your revenue. For every dollar of revenue, a certain percentage of overhead should be assigned. Therefore,
projects generating more revenue receive more overhead.
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Overhead Rate
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Enter the default overhead rate to use when assigning overhead. When
DPS allocates overhead, it uses this rate for all
projects/tasks that do not have a rate defined in the
Projects hub.
This rate is only used if you are assigning overhead. This overhead rate is also used to calculate burdened rates on all
job-to-date
labor on
project reports that use burdened rates.
You do not need to enter decimal points or percent signs. For example, enter 165 for 165%. The overhead rate helps to determine the amount of overhead a
project will receive by calculating the amount for every dollar of direct
labor and revenue ($1.00 * 165% = 1.65 of overhead).
You cannot enter a negative number.
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Variance
Project
|
Specify the regular
project to which
DPS will assign all unallocated overhead.
To maintain reconciliation between
project costs and general ledger costs, you must define this Overhead Variance
Project. This
project stores the difference between the total year-to-date overhead assigned to
projects (via the assignment method) and the actual total indirect expenses incurred. Use the Overhead Allocation report to gauge the variance and whether the rate should be adjusted.
You must enter an overhead variance
project when using the Assign method (not for Proration).
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Variance
Phase
|
If the variance
project has
phases, specify the
phase to which
DPS will assign all unallocated overhead.
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Variance
Task
|
If the variance
project has
tasks, specify the
task to which
DPS will assign all unallocated overhead.
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