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Allocate overhead costs for job costing

You may need to allocate overhead expenses to your customer jobs in addition to those expenses incurred directly for a particular customer job. This article provides a basic method of allocating overhead costs.

Note: There is a more advanced method which includes using items.

Detailed instructions

Create an account and journal entry for tracking:

  1. Set up the overhead allocation account:
    1. Select the QuickBooks Lists menu and then select the Chart of Accounts.
    2. Press Ctrl + N on your keyboard. (Mac users: Click the plus [+] icon at the bottom of the screen)
    3. Select Other Expense as the account type and then assign an appropriate name and number.
  2. Enter a journal entry to allocate overhead costs:
    1. Select the Company menu and then select Make general journal entries.
    2. On the first line of the journal entry, click the drop-down arrow in the Account column and select the allocation account. Enter the total overhead cost in the Credit column. Leave the Name column blank.
    3. On each subsequent line, click the drop-down arrow in the Account column and select the allocation account. Enter the overhead amount for a job in the Debit column and enter the Customer:Job name in the Name column.
    4. When you have entered all of the jobs, click Save and Close.

Since the net effect on the allocated expenses account is zero, it should not show on the Profit & Loss report.

Create the Job Profitability Detail report for one of the customer:jobs and you will see the allocated overhead expenses at the bottom of the report in the "No Item" row.

KB ID# HOW12393
11/27/2014 4:59:41 AM
QYPPRDQBKSWS02 9102 Pro 2013 d6756e