Have Finance Questions? Ask a Financial Expert Online.
Are you saying that you are figuring that your indirect expenses are computed based upon 96 cents for each $1. of wages? If so, it sounds like the company's profit is built into that figure.
Obviously, it depends upon what costs are considered in the indirect costs. There are no set "rules" relating to the way a company computes or allocates it's overhead. Generally if those costs are to be allocated based upon hours worked, that is based upon a normal 40 hours work week. So, you would add up your projected budget expenditures for the expenses to be included in overhead (indirect expenses) and then you would determine an hours overhead rate based upon an annual 40 hour work week. So there would be no allocation of indirect expenses to overtime hours as it would be impossible to accurately project the amount of overtime necessary to complete all of the company's projects for the year ahead.
Without a great deal of additional information, it is difficult to comment upon what is going on politically with respect to your mindset with respect to profit sharing, etc.
Do you have any additional follow-up questions or comments?
If not, please remember to rate my response as that is the only way we receive credit for our work.
Thanks for using JustAnswer.com