Accounting for Total Burdened Costs
Currently we burden labor costs as a separate expenditure item. I have been exploring using Total Burdened Costing, and have figured out the required configurations. I thought the accounting for TBC would replace the accounting for raw costs, but I have found that it creates entries for both the raw cost and the total burdened cost. So labor with a raw cost of $1000, burdened at a rate of .30 would create an entry for $1000 for the raw cost, and for $1300 for the total burdened cost.
Our current AA rules basically move amounts around on the P&L for indirect and contract projects, or between the balance sheet and P&L for capital projects. If I use this approach for both sets of AA rules I will end up with overstated costs. Using the above example, I would have expense entries for both $1000 and $1300, when all I need on the P&L or balance sheet is the TBC of $1300.