Motorsports-X
Hot Rolled
- Joined
- Nov 22, 2014
- Location
- Texas
This will mainly apply to businesses with multiple departments.
disclosure.. im def not an accountant. LOL
How do you guys divide up your cost for supervision across your departments? For instance.. we have a shop rate of 75 per hour in the machine shop.. that includes man, machine, and indirect labor.. but what if you have a manager, or operator that covers multiple departments. Is there any trick or formula you guys use to help divy that cost up?
I was thinking that I should just group ALL supervisory across the company, and average that cost out to every department... but the departments don't turn even remotely close to the same revenue or man hours, so it doesn't work. so now, I'm breaking it down by % of revenue generated per department, and multiplying those % values to the cost and applying it to each departments labor rate.
I know its not really a hard question, just interested in seeing how other companies do it.
disclosure.. im def not an accountant. LOL
How do you guys divide up your cost for supervision across your departments? For instance.. we have a shop rate of 75 per hour in the machine shop.. that includes man, machine, and indirect labor.. but what if you have a manager, or operator that covers multiple departments. Is there any trick or formula you guys use to help divy that cost up?
I was thinking that I should just group ALL supervisory across the company, and average that cost out to every department... but the departments don't turn even remotely close to the same revenue or man hours, so it doesn't work. so now, I'm breaking it down by % of revenue generated per department, and multiplying those % values to the cost and applying it to each departments labor rate.
I know its not really a hard question, just interested in seeing how other companies do it.