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Title: Creating a Cost Structure with one Fringe Pool and Multiple Overhead Pools

Brief description:

If there is a cost pool structure that requires multiple wrap rates such as Client-Site Overhead and Company-Site Overhead rates, the approach below outlines how to set up the indirect rate calculations within Unanet.

What’s covered in this document:

Create Multiple Fringe Cost Elements 

In the example below, Onsite and Offsite Labor must be distinguished from one another to accommodate the Onsite-Offsite Overhead calculation. To achieve this, two different Fringe Cost Elements are created to match Direct Labor Cost Elements (Onsite and Offsite).

To setup Cost Elements, go to Admin > Setup > Accounting > Cost Elements, and create as many Fringe Cost Elements as needed to match the Direct Labor Cost Elements.

In this example, a Fringe Cost Element was created for both Client Site Labor (Onsite) and Company Site Labor (Offsite).

When setting up the Indirect Costs formulas, go to Admin > Setup > Accounting > Cost Structures > Indirect Costs tab:

  • Each Fringe Cost Element should consist of at least:
    • One Labor Cost Element
  • Each Overhead Cost Element should consist of:
    • One Labor Cost Element, at least; and
    • One Fringe Cost Element.

If there is only one Fringe rate, enter the same provisional Fringe rate for all Fringe Cost Elements created.

Pros:

  • Easy to setup formulas (one-to-one relationship)
  • Fringe Calculation is the same for both Onsite and Offsite
  • Easy to validate when running cost reports

Cons:

  • Requires multiple cost elements to maintain and map
  • Requires mutlitple cost structures to settle fringe into a single pool

Note: Unanet recommends the above method instead of attempting to limit the number of cost elements by allocating portions of some cost elements based on a ratio of other cost elements.  The problem with the limiting/allocation approach is that it doesn’t work over multiple fiscal years.  The solution above does work over multiple years.

Additional Information

KC - Cost Structures

Help Docs - Cost Structures



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