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Why do youneed the overhead rate? Do you want to allocate the overhead costs to different departments and determine the Profit and loss of each department?
Normally, overhead rate can be calculated by dividing overhead (indirect) costs -- for example, rent and utilities -- by direct costs -- for example, labor or number of machine hours or such other criterion. So for eg. If your overhead costs are $30,000 and direct costs are $60,000, your overhead rate is .50.
So you would allocate the overhead cost of the entity to the various departments based on the above overhead rate and determine the profit and loss for each department or segment.
At entity level P&L - all overhead costs will be deducted to determine net P&L for the entity.
Let me know if you have any question.
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Your job cost will be Direct cost plus the overhead.
Direct cost will be-
Materials used for the job
Labor cost (including payroll tax and wcomp liab) for the job
Other expenses such as permits or other costs directly related to that particular job.
Overheads will be-
the office rent, if any
the equipment rental ( if the same equipment is used for various jobs)
office administrator salary
Any other expenses you incur in business(not included in direct costs above)
A percentage of the overhead cost needs to be added to the direct cost as calculated above in order to determine your total cost for the job.
In order to arrive at the overhead cost rate- you can determine overhead rate based on the prior month total overhead cost divided by the direct cost. And for this job you can allocate the overhead based on the percentage so calculated on the direct cost incurred for the job.
This will give you the total costs incurred for the job.
You can have a P&L for each job if you want to evaluate each job separately.