Step 9: Indirect Rate Calculations (preview)
MEETS THE FOLLOWING DCAA REQUIREMENTS
- Proper segregation of direct costs from indirect costs
- Identification and accumulation of direct costs by contract
- Logical and consistent method for allocating indirect costs to cost objectives
- Reliable data for use in pricing follow-on acquisitions
In this article, we will compute your actual indirect rates from your Quickbooks accounting system. We provide a sample excel template that you can utilize to compute your indirect rates and allocate indirect costs to your contracts. The Profit by Job – No Name report will be used to allocate indirect expenses to your contracts.
For this article, we are using a simple and commonly seen pool structure that consists of three pools (fringe, overhead and G&A) and a facilities pool. Your pool structure may vary from this form, and many variations do exist and are accepted by DCAA. In our example here, the fringe allocation related to Direct Labor is part of the Overhead base. Facilities expense is allocated based on relative labor, and the base for the G&A allocation is Total Cost Input.
Other variations that you may encounter include . . .