Describe an engineer\'s estimate.Describe the two different types of overhead co

Question

Describe an engineer's estimate.Describe the two different types of overhead costs.Describe HeavyBid and how it is used.How does the hierarchy approach in HeavyBid program assist in the identification or resources?Describe what contractors who do not have enough cash on hand do to make up for the difference between their expenses and their revenues.Discuss the mobilization of payments.Describe a cost control system.How do construction companies control costs?What does a positive number in the variance column indicate?List three management issues that can be used to determine how long a task will take and the best way to accomplish it.Describe innovation.List and describe four factors that affect productivity.Explain soil and rock conditions.Explain the balance point and give an example.Explain why a good safety rating is important for a contractor.Discuss the uninsure costs of accidents.List three functions of OSHA.List and discuss the primary components of a safety management plan.Discuss property safety equipment for individual workers.List three benefits of applying 3D drawings to the construction process.

Explanation / Answer

In the world of manufacturing%u2013as competition becomes more intense and customers demand more services%u2013it is important that management not only control its overhead but also understand how it is assigned to products and ultimately reported on the company's financial statements. We view overhead as two types of costs and define them as follows:

Manufacturing overhead (also referred to as factory overhead, factory burden, and manufacturing support costs) refers to indirect factory-related costs that are incurred when a product is manufactured. Along with costs such as direct material and direct labor, the cost of manufacturing overhead must be assigned to each unit produced so that Inventory and Cost of Goods Sold are valued and reported according to generally accepted accounting principles (GAAP).

Manufacturing overhead includes such things as the electricity used to operate the factory equipment, depreciation on the factory equipment and building, factory supplies and factory personnel (other than direct labor). How these costs are assigned to products has an impact on the measurement of an individual product's profitability.

Nonmanufacturing costs (sometimes referred to as %u201Cadministrative overhead%u201D) represent a manufacturer%u2019s expenses that occur apart from the actual manufacturing function. In accounting and financial terminology, the nonmanufacturing costs include Selling, General and Administrative (SG&A) expenses, and Interest Expense. Since accounting principles do not consider these expenses as product costs, they are not assigned to inventory or to the cost of goods sold. Instead, nonmanufacturing costs are simply reported as expenses on the income statement at the time they are incurred.

Nonmanufacturing costs include activities associated with the Selling and General Administrative functions. Examples include the compensation of nonmanufacturing personnel; occupancy expenses for nonmanufacturing facilities (rent, light, heat, property taxes, maintenance, etc.); depreciation of nonmanufacturing equipment; expenses for automobiles and trucks used to sell and deliver products; and interest expenses. (Note that factory administration expenses are considered part of manufacturing overhead.)

Although nonmanufacturing costs are not assigned to products for purposes of reporting inventory and the cost of goods sold on a company%u2019s financial statements, they should always be considered as part of the total cost of providing a specific product to a specific customer. For a product to be profitable, its selling price must be greater than the sum of the product cost (direct material, direct labor, and manufacturing overhead) plus the nonmanufacturing costs and expenses.

Also check link:http://www.fhwa.dot.gov/programadmin/contracts/ta508046.cfm

it might help you.

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